Reducing the cost of blue and green hydrogen
Economics of blue hydrogen strong in near-term
Panellists agree it will take time and incentives to reduce cost of green hydrogen to a level where it is competitive with the blue variety
Blue hydrogen can be produced for as little as $1/kg in the US, but this is still twice the cost of grey hydrogen, meaning government intervention will be vital to spur production of the cleaner fuel, according to various speakers at conferences this week. Blue hydrogen will always cost more to produce than grey hydrogen because of the additional carbon capture and storage processes required, Richard Mew, director at consultancy Koyos Resources, told the First Element conference. “The general consensus is that you need a cost of producing hydrogen at $1.5/kg in order for significant carbon abatement to occur,” he said, noting this was possible only in jurisdictions with low gas prices.
Also in this section
4 February 2026
Europe’s largest electrolyser manufacturers are losing patience with policymakers as sluggish growth in the green hydrogen sector undermines their decision to expand production capacity
2 February 2026
As a fertiliser feedstock, it is indispensable, but ammonia’s potential as a carbon-free energy carrier is also making it central to global decarbonisation strategies
28 January 2026
The development of hydrogen’s distribution system must speed up if the industry is to stand any chance of grabbing a meaningful slice of the low-carbon energy market
14 January 2026
Continent’s governments must seize the green hydrogen opportunity by refining policies and ramping up the development of supply chains and infrastructure
