In this Policy Brief, we will tackle two questions: i) what potential does hydrogen (H2) have for our 2030 and 2050 economics, and ii) which are the production technologies and the underlying costs for producing cleaner H2, which is able to substitute dirty H2. No one knows the precise answer to the first question, however we can disentangle it into five main dimensions: uses of cleaner H2; production key factors; production Technologies; maturity & costs; and costs of production key factors. Dirty H2 has, thus far, been easily produced by using fossil fuels – with high GHG emissions. Towards EU decarbonisation, cleaner H2 promises to decarbonize several “hard to abate” uses – be those uses of dirty H2 currently being produced or of non-H2 energy vectors. Of course, innovations – such as cleaner H2 - are all about facing the unknown: novelties always challenge conventional wisdom, in much the way that solar PV or offshore wind seemed anecdotal 20 years ago. This fact leads to the second question: the production technologies and the costs of cleaner H2, which is able to substitute dirty H2, by the horizons 2030 and 2050. We will largely refer to the previous findings of the FSR Technical report “Cost effective decarbonisation study” (Nov. 2020). The cleanest and most mature new H2 production technology in 2030 will be, on the basis of the information we have today, the electrolysers. While results are naturally extremely hypothetical for Horizon 2050, mature technologies like electrolysers have the potential to become points of absolute reference in 2050 “Net Zero” market economics. SMR with CCS and Methane Pyrolysis with CCU, fed with biomethane, may one day offer some competition to electrolysers
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