Carbon price impact on hydrogen production costs in the EU 2030

Carbon pricing needs to reach roughly 100 euros per metric ton of carbon dioxide by 2030, for the cheapest renewable hydrogen to be competitive with fossil-based hydrogen. Nonetheless, carbon pricing need to reach as high as 300 euros per metric ton of carbon dioxide for all renewable hydrogen to have a production price that breaks even with fossil-based hydrogen production cost. Furthermore, natural gas costs remain cheaper than any hydrogen type if carbon prices do not exceed 100 euros per metric ton of carbon dioxide.

Hydrogen has been explored as an energy source to mitigate climate change impacts, and alongside its production, new strategies, incentives, and guidelines are also being developed. Currently, global hydrogen production is dominated by natural gas reforming, and green hydrogen prices are not competitive enough to attract customers. Consequently, as of 2021, the market demand for fully decarbonized green hydrogen is still very low compared to the demand for other fuels.