Green Hydrogen powered by Blockchain

What is HydrogenChain?

We are a research project with the aim of advancing the establishment of a hydrogen market in Europe through the use of blockchain technology. Our focus lies on the development of digital origin proofs for green hydrogen and the representation of digital market processes for H2. Since August 2022, we have been working in a consortium consisting of Exxeta, Blockchain Competence Center Mittweida, and Ökötec Biogasanlagen GmbH, funded by the BMWK (Federal Ministry for Economic Affairs and Energy). Additionally, we receive support from a variety of companies and institutions that serve as subject matter experts and partners for testing the MVP (Minimum Viable Product). The project is expected to be completed in July 2025.

Our Goals

The overall goal of the project is to develop a functional Blockchain Minimum Viable Product (B-MVP), which includes a suitable blockchain as the underlying technology for decentralized data storage in a shared database and platform (along with the implementation of automated smart contracts). On this platform, all actors involved in the process chain (such as renewable energy producers, hydrogen producers utilizing surplus energy, hydrogen transport and distribution network operators, and hydrogen consumers) can map their trading and transaction processes (such as settlement, invoicing, reporting, and proof processes, as well as market mechanisms) according to their roles and processes in the market. The main focus of the blockchain application is the proof of origin for green hydrogen and the traceability of the value chain of renewable energy from the producer to the end consumer. Thus, the entire supply chain of green hydrogen is represented securely and transparently.

The project goals include:

1. Development of a MVP that can be launched after the research project.
2. Digital representation of origin proofs for green H2 with the possibility of integrating other IT systems
3. Improvement of trading and transaction processes along the entire process chain. It is demonstrated that the processes can now be executed flexibly and transparently, securely stored, shared, and evaluated, granting shared protected access and increasing cost efficiency.
4. Creating synergies with other projects focusing on origin proofs, smart contracts, blockchain, or hydrogen.

The technological objectives of the project include:

1. Development of a proprietary blockchain and evaluation of various application possibilities. This includes examining the type of blockchain required, the underlying blockchain architecture, and the necessary chain code.
2. Special attention is given to security and data privacy. Trust must be guaranteed in transparent markets, ensuring tamper-proofing and protection against attacks.
3. Examination of the interfaces to be served and the existing systems that need to be connected to the process participants.
4. Creation of origin proofs and smart contracts for the automated execution of process steps, with evaluation of the application's scalability in field tests.
5. Investigation of how artificial intelligence (AI) components can be integrated into the process to optimize purchasing decisions.

Why Blockchain?

The blockchain technology has the advantage of creating a completely new digital twin of the hydrogen market, standardized and suitable for European markets from the very beginning. The blockchain technology is globally applicable and does not require country-specific data management. Especially in the early stages of market development, this is a significant advantage as it allows for the establishment of digital, standardized, and European-oriented foundations for the H2 market. There is a need for research in the field of blockchain technology, which can be addressed in the context of the hydrogen project, particularly regarding energy efficiency in blockchain applications. Additionally, the project can explore the use of certificates and proof of using green hydrogen for the operation of the blockchain. The current energy consumption in blockchain transactions is high, resulting in high transaction costs. These challenges are being addressed within the research project. With high data availability and transparent process mapping within the blockchain, significant potential for energy savings is unlocked. The data collected also provides an opportunity to consider the integration of artificial intelligence (AI) in the research project.