Emerging hydrogen spot indices: Price taker or maker?

Hydrogen is critical for decarbonisation in energy and hard-to-abate industries, such as refining, steel, and chemical production. The hydrogen energy transition requires systemic changes, including market and trade developments. Academic research has largely overlooked the hydrogen spot trading market and pricing mechanisms, despite their crucial role in mitigating price volatility, managing supply risks, optimising resource allocation, and promoting investments to accelerate the low-carbon hydrogen transition. We critically evaluate commonalities and differences of the key hydrogen spot indices and investigate whether they are market demand-driven, self-regulating, transparent, reliable, and consistent. We apply thematic content analysis to
examine the hydrogen spot pricing methodology guides of two major price reporting agencies: Argus and S&P Global. We find that both hydrogen spot indices adopt a cost-based pricing mechanism and method, which are not market demand-driven and fail to capture customer demand and willingness-to-pay. Both indices rely on ex ante static features of cost structures, which are not self-regulating but are influenced by policy and subsidy. These pricing mechanisms and methods lack transparency, reliability, and consistency. We provide a novel framework for understanding key features, similarities, and differences of major hydrogen spot price indices, which serve as a departure point for future research directions.