Green hydrogen projects need customers before they need a bigger announcement

Separate interest from bankable demand

Hydrogen attracts attention because it can connect renewable power with industrial processes that need a molecule rather than electricity alone. The commercial challenge is that an interested buyer is not necessarily ready to change its plant, accept a new price or sign a long contract. For developers in BRICS markets, the first development milestone should be evidence of a workable customer use case. A large production target cannot substitute for a realistic delivery arrangement.

The IEA's Global Hydrogen Review 2025 identifies cost, infrastructure readiness and regulatory uncertainty as obstacles to deployment. IEA Global Hydrogen Review 2025. The business analysis here focuses on decisions a developer can control: buyer selection, project scale, contractual allocation and the sequence of investment. It does not treat an announced project pipeline as confirmed sales.

Start with the industrial process

A refinery, fertilizer producer and steel plant have different consumption profiles and integration needs. Even within one segment, demand may vary with maintenance schedules or input prices. Developers should establish the required purity, pressure, hourly flow and tolerance for interruption. These details determine storage, compression and backup arrangements. A buyer's annual demand figure may look attractive while its daily operating requirements make a proposed production system unsuitable.

The commercial team should also identify who benefits from a lower-emissions product. If the buyer cannot secure a premium, meet a binding requirement or reduce another cost, willingness to pay may be limited. Certification alone does not create demand. A credible offtake discussion should link the input to a saleable downstream product and explain which customer is expected to cover the additional cost.

A deliberately modest project scenario

Assume a local industrial customer signs for 2,000 tonnes annually at an illustrative price of 4,000 currency units per tonne. Gross revenue would be 8 million units before production, delivery, financing and tax. If the proposed project can produce 3,000 tonnes, the remaining 1,000 tonnes should not automatically receive the same price in the financial model. It may have no qualified buyer or require a more expensive delivery route.

Test a case in which the anchor customer purchases only 80 percent of its contracted amount and the uncommitted volume sells at a lower margin. Then examine whether debt service and fixed operating costs remain covered. These are planning assumptions, not observed hydrogen prices or market forecasts. Their purpose is to expose reliance on optimistic utilization and untested demand.

Renewable power changes the operating design

An electrolyser's electricity supply deserves separate analysis from the hydrogen sales contract. The relevant questions include availability, delivered cost, connection conditions and the operational consequences of variable generation. Higher equipment utilization may require a more expensive electricity mix. A low headline renewable tariff may exclude network charges or balancing needs. Developers should compare complete supply configurations, including the cost of interruptions and restart cycles.

Water supply, treatment and discharge arrangements require equally serious attention. A project should establish local availability and competing needs before relying on a broad regional resource claim. Shared infrastructure can improve economics if capacity, ownership and maintenance responsibilities are clear. It can also introduce a dependency that delays an otherwise ready production facility. The critical path should show these dependencies visibly.

Contracts should make uncertainty explicit

Offtake terms need definitions for specification, measurement, delivery point and acceptable downtime. A preliminary expression of interest should remain separate from a binding commitment in investor reporting. If a buyer expects certification under a particular framework, both sides should agree how changes to that framework affect performance and price. Cross-border projects need current jurisdiction-specific review before treating environmental attributes as transferable commercial value.

• Track contracted volume separately from prospective and discussion-stage demand.
• Measure production cost per accepted tonne at actual operating conditions.
• Monitor electricity availability against the customer's required delivery profile.
• Record commissioning dependencies outside the developer's direct control.
• Show the cash effect of delayed customer conversion or infrastructure completion.

Build a service ecosystem around credible projects

Not every entrepreneur needs to own a production plant. Engineering studies, metering, maintenance, workforce training and industrial integration can become viable services when linked to projects with funded customers. Suppliers should avoid building capacity solely around promotional announcements. Purchase orders, committed capital and verified schedules are stronger indicators of reachable demand.

BRICS cooperation can widen the pool of partners, equipment and industrial expertise, but each project still needs local commercial logic. The strongest opportunity is a sequence of justified commitments: a buyer that needs the product, a supply design that can deliver it and a contract that pays for the risks being carried. Expansion becomes sensible when that sequence works at a scale the participants can finance and operate.