Journally Speaking: Building a hydrogen market
The Clean Hydrogen Buyers Alliance (CH2BA) in September 2025 proposed the Gulf Coast Hydrogen Index (GCHI), a commodity benchmark built from real transaction data and designed to bring price transparency and investor confidence to the emerging hydrogen market.
Hydrogen is already a $200-billion global market, according to CH2BA, which notes the pivotal role establishing the Henry Hub as a benchmark played in scaling natural gas markets and sees the GCHI as potentially unlocking the hydrogen market in a similar way.
“This is the Henry Hub moment for hydrogen,” said Dr. Edward Morse, Clean Hydrogen Transaction Advisory Committee co-chair. “Capital is waiting. Buyers are ready. But until now, there’s been no credible, transparent price signal to guide clean hydrogen investment or contracting.”
CH2BA would eliminate the current ‘rainbow scheme’ when it comes to subdividing the hydrogen market, replacing it with a tiered system based on carbon intensity.
Proposed tiers would consist of:
- Basic hydrogen (formerly “Grey”): ≤ 11.3 kg CO2e/kg H2.
- Low-carbon hydrogen (formerly “Blue”): ≤ 3.38 kg CO2e/kg H2.
- Ultralow-carbon hydrogen (formerly “Green”): ≤ 0.45 kg CO2e/kg H2.
“By focusing on carbon intensity, the benchmark is universally relevant to any transaction,” added Zane McDonald, executive director of Open Hydrogen Initiative.
Hydrogen is in widespread use in both refining and agriculture. Supply is also abundant, particularly on the US Gulf Coast via steam methane reforming and as a natural gas byproduct.
These supply and demand points are already connected by pipeline. But increased market transparency and consistency are essential if hydrogen’s use is to continue to grow. “The lack of a standard price signal has kept hydrogen a niche market,” said John Flory, president of CH-2BA. “We’ve seen how commodity benchmarks like Brent, WTI, and Henry Hub turned complex markets into investible ones.”
“This index is the foundation for a real market,” said Brett Perlman, organizing partner of HyVelocity regional hydrogen hub. “It creates common rules, trusted data, and the confidence to globally scale clean hydrogen.”
HyVelocity was among the projects mentioned on a Department of Energy list leaked in early October 2025 regarding termination of federal funding. It had been awarded a $1.2-billion government grant in October 2023.
DNV’s Energy Transition Outlook 2025 noted that over the past 3 years its forecast for hydrogen’s share of the 2050 energy mix had slipped to 3.5% from 4.8% due to economic headwinds and a lack of global cooperation. Hydrogen and its derivatives are part of the “expensive side of decarbonization, with uptake driven by policy rather than market forces…[and] only really scaling in the 2040s,” DNV said.
Persistence
Even in the face of such headwinds, CH-2BA’s efforts have continued. The North American Energy Standards Board’s (NAESB) executive committee has since formalized the replacement of color-based hydrogen categories with those based on carbon intensity by approving the proposed contract.
NAESB’s action also enabled book-andclaim transactions through bundled or unbundled environmental attribute certificates (EAC). EAC verify how hydrogen was produced and its carbon intensity, allowing buyers to make credible emissions claims even if not taking physical delivery.
A 30-day NAESB ratification period on the contract ended Nov. 24, 2025.
About the Author
Christopher E. Smith
Editor in Chief
Chris brings 32 years of experience in a variety of oil and gas industry analysis and reporting roles to his work as Editor-in-Chief, specializing for the last 20 of them in the midstream and transportation sectors.