Low Carbon Hydrogen
Low-carbon hydrogen can support the ramp-up of the hydrogen market until sufficient green hydrogen becomes available. This white paper analyzes the conditions under which low-carbon hydrogen can meet the emission thresholds defined by regulation, and discusses the key points of debate that arose during the publication of the corresponding legal framework for emissions accounting methodology. Furthermore, it examines the compliance with threshold values for end products when low-carbon hydrogen is used in production and considers monetary and non-monetary incentive mechanisms.
Spectrum of Low-Carbon Hydrogen Types
Low-carbon hydrogen can be produced through various methods, especially: conventionally with carbon capture and storage (blue hydrogen), via methane pyrolysis (turquoise hydrogen) or through electrolysis using the general electricity mix (yellow hydrogen).
Greenhouse Gas Emissions of Low-Carbon Hydrogen
The EU Taxonomy sets an emissions threshold of 3 kg CO₂-equivalent per kg of hydrogen, while the Gas Market Directive allows up to 3.4 kg CO₂-equivalent per kg of hydrogen. Methane leakage in the upstream supply chain alone can account for 16–123 % of the Gas Market Directive’s emission threshold for blue hydrogen, depending on the region of natural gas origin. The near zero emission thresholds defined by the German Federal Ministry for Economic Affairs (BMWK) for basic materials – especially ammonia and ethylene – are unlikely to be met by low-carbon hydrogen in the future.
Legal Framework for Greenhouse Gas Accounting
The standard emission factor for gas used to determine upstream emissions of low-carbon hydrogen, as well as electricity sourcing criteria and the approval of project-specific emission values, shaped the discussions surrounding the legal development of the methodology under the Gas Market Directive.
Monetary and Non-Monetary Incentive Mechanisms
Monetary incentives for the use of low-carbon hydrogen exist, for example, through the EU Emissions Trading System (EU ETS) and the German Gebäudeenergiegesetz. Non-monetary incentives are particularly relevant in the maritime and aviation sectors. However, the current willingness to pay for low-carbon hydrogen remains lower than the cost gap compared to conventional hydrogen.
