AlwaysFree: Green Hydrogen Production Cost To Continue Dropping: EU Officials

European Commission President Ursula von der Leyen said on Monday that the cost to produce green hydrogen in Europe and nearby countries is set to decline. According to her, the region’s green hydrogen production capacity would likely exceed current targets by 2030. Green hydrogen is currently far more expensive than grey hydrogen, made from natural gas. However, the soaring prices of gas mean that the cleaner hydrogen can start to compete. Europe’s rising carbon tax also supports the competitiveness of green hydrogen.

In 2020, it cost €2 ($2.25) to produce a kilogram of grey hydrogen and €6 ($6.76) to produce green hydrogen. However, the green hydrogen production cost is expected to shrink to less than €1.8 ($2.03) by 2030, von der Leyen said. On the other hand, fossil-based hydrogen would be less competitive on rising gas prices and carbon tax.

EU climate policy chief Frans Timmermans expects the EU and its neighbours such as Ukraine and Morocco to install 40 GW of green hydrogen capacity by 2030. Hydrogen demand came in at around 90 million tons last year, most of which was produced from fossil fuels, resulting in nearly 900 million tons of CO2 emissions, the International Energy Agency said. Green hydrogen can help cut fossil fuel consumption from hard-to-decarbonise sectors, but it requires vast amounts of clean energy to scale up.

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