Hydrogen series – Episode 3 – Economic conditions required to switch to low-carbon production

The use of low-carbon hydrogen is often at the heart of industrial players’ decarbonization strategies. Beyond future new uses (hydrogen motorization, energy storage, etc.), 8.7 million tons of hydrogen were already consumed in Europe in 2020, 82% of which by two main industries: oil refining and ammonia synthesis.

With 91% of European hydrogen production capacity running on natural gas through the steam-reforming process, hydrogen production emitted over 80 million tons of CO2 in 2020, or 2.5% of EU-27 emissions. Replacing this hydrogen with low-carbon hydrogen would considerably reduce these emissions.

In addition to the technological and industrial challenges, low-carbon hydrogen production must also become economically competitive, so that today’s consumers can rapidly decarbonize their activities. This report therefore looks at the influence of various economic factors on the difference between the production cost of low-carbon hydrogen and that of fossil hydrogen.

The study was carried out in collaboration with Zenon Research, a think-tank specializing in climate technologies.