Producing hydrogen from renewable power only could drive up its price over the coming decades as the gas becomes the low-carbon fuel of choice for the European Union. As the EU moves to aggressively cut carbon emissions across all sectors in order to hit climate neutrality by 2050, green hydrogen is seen as key to achieving that goal.
Should the bloc shun the use of hydrogen made from fossil fuels completely then using the green version of the gas across all sectors will become more costly as demand grows over the coming decades, according to analysis by Aurora Energy Research.
A key debate is whether to use hydrogen from renewable electricity, known as green hydrogen, or a version known as blue hydrogen that’s made from natural gas with a process that captures and stores CO2 emissions.
Producing hydrogen from renewable power could be a boon to developers of solar and wind farms. Electrolyzers, the machines that split hydrogen out of water, could turn on when there is little demand elsewhere and power prices are cheap.
Hydrogen Price
Costs are set to plummet for all kinds of clean hydrogen
Source: Aurora Energy Research
Hydrogen Color Set to Take Center Stage in EU Energy Debate
However, if European governments decide only to focus on green hydrogen, that could have drawbacks for the industry, according to Aurora’s research, that focused on Germany and the Benelux region.