Carbon abatement costs of green hydrogen across end-use sectors

Abstract

Green hydrogen has emerged as a potentially important pathway in decarbonizing the hard-to-abate sectors, including freight, dispatchable power, and industry. Many organizations predict that green hydrogen will become cost competitive with fossil fuels as production costs fall. However, most published green hydrogen cost estimates do not consider storage and distribution costs and how they vary across sectors. We estimate the carbon abatement cost of green hydrogen across major sectors in the United States, considering each sector’s storage and distribution requirements. At current delivered prices, green hydrogen is a prohibitively expensive abatement strategy, with carbon abatement costs of $500–1,250/tCO₂ across sectors. If production costs reduce to $2/kgH₂, low-cost carbon abatement opportunities will remain limited to sectors already using hydrogen (e.g., ammonia) unless storage and distribution costs decrease. Our findings suggest that green hydrogen’s potential is narrower than suggested, emphasizing the need for diverse technological options to decarbonize hard-to-abate sectors.