Low-carbon hydrogen and e-fuels: Unit economics
Why green hydrogen still costs dollars more than gas
What this tab covers What it costs to move a unit of energy this way: capital and operating costs, tariffs, utilisation and how it compares with the alternatives.Hydrogen from unabated gas costs about USD 1 per kg in US conditions, and capture adds about half a dollar. Electrolytic hydrogen still costs several dollars more outside the best sites, though cheap Chinese equipment and strong renewables are narrowing the gap.
Key costs
| Measure | Value | Note |
|---|---|---|
| SMR without capture (US, NETL) | 1.06 USD/kg H2 (2018 USD)6 | 483,000 kg/day plant; gas about 73% of cost (calculated) |
| SMR with 96.2% capture | 1.54 (1.64 with CO2 transport and storage) USD/kg H2 (2018 USD)6 | |
| ATR with 94.5% capture | 1.51 (1.59 with transport and storage) USD/kg H2 (2018 USD)6 | 660,000 kg/day plant |
| Coal gasification, without and with 92.5% capture | 2.58 / 2.92 USD/kg H2 (2018 USD)6 | Capital cost dominates |
| PEM electrolysis, US status | above 3 (2022); target 2.00 (2026), 1.00 ultimate USD/kg H28 | DOE technical targets |
| Gap between low-emissions and unabated fossil hydrogen | 1.5-8 now; 1-3 by 2030 USD/kg H2510 | IEA 2024 review; just above USD 0.5/kg in parts of Latin America by 2030 |
| Pyrolysis cost (developer claim) | about 1.50 USD/kg H27 | Aurora Hydrogen's own estimate, before carbon sales |
| Investment in low-emissions hydrogen projects | nearly 7 USD billion (2025)2 | About double 2024 |
Where the money goes
| Item | Share or amount |
|---|---|
| Natural gas (reforming) | About 73% of unabated SMR cost and about 50% with capture (calculated from NETL)6 |
| CO2 transport and storage | About 5-6% of cost in capture cases6 |
| Capital (gasification) | Largest cost item in coal cases6 |
| Electricity and electrolyser capital (electrolysis) | Roughly one-third to three-fifths electricity, depending on equipment price (see Electrolysers tile)89 |
Worked example (calculated). Capture raises the NETL SMR cost from USD 1.06 to 1.54 per kg, a premium of USD 0.48. If about 9 kg of CO2 is captured per kg of hydrogen (illustrative: the 5.5 kg from the feed plus most of the furnace CO2), that is roughly USD 53 per tonne of CO2. What power price would let electrolysis match USD 1.54? With Chinese equipment at USD 800/kW, 8% cost of capital, 20 years and 90% running hours, capital and upkeep add about USD 0.65/kg, leaving USD 0.89 for 55 kWh, or about USD 16 per MWh around the clock. Few places offer that today, which is why committed low-emissions output for 2030 is only 4.3 Mt, against a pipeline that has shrunk to 27 Mt (source 1).
Sources
- Global Hydrogen Review 2026: Investment and innovation International Energy Agency, 2026
- Global Hydrogen Review 2024: Executive summary International Energy Agency, 2024
- Comparison of Commercial, State-of-the-Art, Fossil-Based Hydrogen Production Technologies (costs in 2018 USD) US DOE National Energy Technology Laboratory, 2022
- Recent Advances in Electrified Methane Pyrolysis Technologies for Turquoise Hydrogen Production (Rohani, Sudiiarova, Lyth, Badakhsh), Energies 18(9) 2393 MDPI, 2025
- Technical Targets for Proton Exchange Membrane Electrolysis US Department of Energy, Hydrogen and Fuel Cell Technologies Office, 2023
- Green H2 electrolyser sector enters consolidation: IEA (reporting IEA Global Hydrogen Review 2026) Argus Media, 2026
- The IEA's Global Hydrogen Review 2025: green hydrogen ramp up is slower than we wanted, but it is happening all the same (reporting IEA figures) Green Hydrogen Organisation (GH2), 2025