Green hydrogen can cost less than 'grey' alternative, says EU's von der Leyen

[MADRID] High natural gas prices mean green hydrogen produced with renewable energy can already be cheaper than its carbon-emitting alternative, European Commission President Ursula von der Leyen said on Monday.

Several countries and companies see green hydrogen - obtained by splitting the element from oxygen in water with renewably-produced electricity - in areas such as heavy industry, as a way to cut greenhouse-gas emissions.

Until now, green hydrogen has been far more expensive than the more common polluting "grey" version, which is produced using natural gas or methane.

"Because of the current rise in gas prices that we see, green hydrogen today can even be cheaper than grey hydrogen," she told an event in Brussels.

In 2020, grey hydrogen could be produced for around 2 euros (S$3.09) per kilogram, compared to as much as 6 euros per kg for the green version, industry estimates found.

But von der Leyen said green hydrogen could cost less than 1.8 euros per kg by 2030, and that should be the bloc's target.

"This goal is within reach," she said. "We have to scale up clean hydrogen production, expand its applications and create a virtuous cycle where demand and supply feed each other and bring the prices down, that's the principle."

REUTERS