Hydrogen has long been championed as a cornerstone of the global decarbonisation agenda, particularly for heavy industries such as steel, cement and chemicals, which are difficult to electrify. Even though investment and government policy have accelerated, the sector is still progressing slower than expected due to technological and infrastructure challenges. Financing remains difficult as lenders apply traditional project finance criteria to a nascent market. At the heart of this complexity sits hydrogen offtake agreements – the contractual backbone needed to provide certainty for suppliers, offtakers and investors alike.
Key Issues in Hydrogen Offtake Agreements include:
- Term & volume commitments: Long-term agreements are critical for bankability, balancing revenue certainty for suppliers with supply security for offtakers.
- Start date & construction risks: Project complexity creates timing and reliability risks, requiring careful allocation between suppliers, EPC contractors and offtakers.
- Pricing: Immature markets and lack of benchmarks complicate pricing, requiring creative structures that balance certainty, flexibility and bankability.
- Quality & sustainability standards: Hydrogen offtake must address both chemical quality and environment credentials, often exceeding minimum regulatory requirements.
- Change in Law: Future regulatory shifts poses material risks, so agreements need to clear mechanisms to allocate costs and benefits fairly.
Hydrogen offtake agreements sit at the intersection of project finance, energy regulation, commodities trading and environmental law. Each deal involves balancing multiple risk allocations while anticipating future market and regulatory developments. For energy lawyers, this is where their expertise comes to the fore.
Lawyers with experience in drafting and negotiating complex offtake agreements in the power, LNG and renewables market are in high demand. Their ability to adapt established structures into a rapidly evolving sector is critical to helping projects reach financial close. As hydrogen projects often cross-jurisdictions, lawyers with international experience are particularly sought after.
We specialise in recruiting energy lawyers who operate at the forefront of these transitions. The hydrogen economy is creating new legal challenges that demand sharp commercial awareness, technical versatility and understanding of both established and emerging energy markets.
