IEEFA report finds blue hydrogen is not a low-carbon solution

A report by the Institute for Energy Economics and Financial Analysis concludes that blue hydrogen — produced from fossil fuels with carbon capture — is neither clean nor low-carbon and does not constitute a credible solution to the climate crisis. The report finds that the US government model used to assess blue hydrogen systematically understates its greenhouse gas impact in at least four distinct ways.

The IEEFA report identifies four flaws in the US Department of Energy's methodology for evaluating blue hydrogen emissions. The model significantly underestimates methane emissions from fossil fuel-based hydrogen production, applies a 100-year global warming potential for methane rather than the more stringent 20-year rate, incorrectly assumes hydrogen emissions have no climate impact, and projects excessively optimistic rates of carbon capture from an unproven and costly technology. Authors David Schlissel and Anika Juhn contend that correcting these assumptions would reveal blue hydrogen as an extremely dirty energy alternative.

The fossil fuel industry has promoted blue hydrogen as a climate-compatible pathway, backed by significant US government incentives. IEEFA argues this narrative diverts capital and policy attention from proven clean energy options including wind, solar, battery storage and energy efficiency. The report analyses carbon intensity across a range of methane emission rates, hydrogen leakage scenarios and carbon capture effectiveness levels, concluding that even under highly favourable assumptions the fuel fails to qualify as low-carbon. Funding government and investor support for blue hydrogen projects, the authors warn, risks worsening global warming by locking in large greenhouse gas emissions for decades.

IEEFA's findings carry implications for energy policy in India and across Asia, where blue hydrogen has been discussed as a potential decarbonisation tool for hard-to-abate industries including steel and fertilisers. The report's conclusion — that green hydrogen powered by renewable electricity is a far superior pathway — aligns with India's National Green Hydrogen Mission, which targets green hydrogen production at US$1-2 per kilogram. Policymakers considering hydrogen roadmaps are urged to avoid blue hydrogen commitments that could entrench fossil fuel dependency under a low-carbon label.

Key figure — 4 — number of ways the US government model understates blue hydrogen's climate impact, per the IEEFA report