Remove CO₂ protection to make green hydrogen competitive – NGO

Free allocations in the EU ETS means grey hydrogen producers are protected from carbon costs

A switch from unabated fossil hydrogen to renewable hydrogen is nearly viable economically with prices in the EU Emissions Trading System (ETS) at their current levels, but only if free allocation in the scheme is abolished, according to an analysis by non-governmental organisation Sandbag. The financial costs of such a switch in the methanol and fertiliser sectors are very close to a market price in the ETS of more than €55/t ($65/t) and are already below this price in the refining sector thanks to a market premium expected from selling Renewable Energy Directive II (Red II)-compatible transport fuel. The EU ETS market closed last week at just under €58/CO₂. “The switch to renewable h