Study Reveals Impact of CO₂ Accounting Rules on Hydrogen Investment Incentives
A study highlights that strict CO₂ accounting regulations can encourage investment in electrolytic hydrogen production, offering internal returns of 8-15%. However, these regulations do not guarantee low-carbon hydrogen, raising concerns about the effectiveness of current support programs.
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Research from Mannheim indicates that stringent CO₂ accounting rules can provide sufficient investment incentives for Power-to-Gas plants, achieving internal rates of return between 8-15%. However, the hydrogen produced may not be emissions-free, especially if operators utilize grid electricity as prices rise, potentially increasing CO₂ intensity to levels similar to 'blue' hydrogen.
Conversely, less rigorous rules could boost returns up to 23%, raising emissions intensity to 'grey' hydrogen levels. The study, published in Nature Communications, emphasizes that how emissions are accounted for is crucial for the success of hydrogen support programs, particularly in Europe, where regulations are evolving. Countries like Germany are actively pursuing hydrogen imports from Canada, North Africa, and Australia, while discussions continue regarding the timing of more stringent compliance measures.
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