The Offtake-Commitment Mechanism: Sigma-Channel Identification via Cross-Sectoral Heterogeneity in Clean-Hydrogen Investment

Sake Saakstra

MPRA Paper from University Library of Munich, Germany

Abstract: Pre-financial-investment-decision (pre-FID) offtake commitments in clean-hydrogen projects reduce the cumulative cancellation probability by 11.3 to 13.2 percentage points across five convergent matching estimators (IPWRA, OLS-adjusted, regression-adjusted matching, doubly-robust IPTW, naive IPW), using a project-level panel of 1,354 announced developments from the S&P Global Hydrogen Project Database (2010-2026). The estimate is exceptionally robust to unobserved-confounder bias: the Oster delta_null = 20.23 implies that for unobservables to explain the effect, they would need to be twenty times more influential than the maximally-included set of observable controls. This is the largest and most identification-secure treatment effect in the related dissertation work. The substantive interpretation invokes the sigma-channel of the real-options framework: offtake commitments reduce revenue volatility and counterparty risk simultaneously. The sigma-channel comparative statics predict that revenue-volatility-reducing instruments should produce larger effects in high-volatility sectors than in low-volatility sectors. We test this prediction directly via cross-sectoral heterogeneity: the offtake-commitment ATT is concentrated in power and heat (-0.30 pp) and transport (-0.27 pp), and substantially smaller or null in chemical (-0.04 pp) and refinery (-0.02 pp). The pattern matches the sigma-channel prediction in sign and approximate magnitude, providing direct mechanism-identifying empirical evidence that complements the average-treatment-effect identification. The methodological contribution is a cross-sectoral heterogeneity test as a direct mechanism-identifying strategy, supplementing the conventional partial-identification sensitivity analysis (Oster bounds). The policy implication is that capex-grant programmes such as the EU Innovation Fund should incorporate demonstrable pre-FID offtake-commitment eligibility requirements, jointly addressing the financing-constraint friction (the Innovation Fund's current target) and the counterparty-risk friction (the Innovation Fund currently leaves unaddressed).

Keywords: offtake commitment; counterparty risk; revenue volatility; real options; sectoral heterogeneity; matching estimators; Oster sensitivity; clean hydrogen (search for similar items in EconPapers)
JEL-codes: D81 G31 Q42 Q48 (search for similar items in EconPapers)
Date: 2026-05-28
References: Add references at CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/129304/1/MPRA_paper_129304.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:129304

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().