Hydrogen may need green products premium

A price premium for products made with green hydrogen may be more effective than carbon pricing or subsidies

A price premium for products made using green hydrogen could be a more effective form of financial aid for supporting capacity construction than a high carbon price or subsidies, Emmanouil Kakaras, executive vice president at Mitsubishi Heavy Industries said during a recent S&P Global Asia Energy Transition conference. Green hydrogen’s potential to decarbonise hard-to-abate sectors such as steelmaking, cement and aluminium has raised the prospect of future products such as green steel and green aluminium. A higher price in the market for these products could motivate companies in the sectors to adopt green hydrogen in their industrial processes. Adding hydrogen to a production process re