4Q 2023

Differences in Carbon Intensity Criteria Will Impact Global Electrolyzer Adoption

Policymakers generally agree that green hydrogen produced using renewable electricity is critical for decarbonization, particularly in hard to abate sectors. However, developing support schemes for green hydrogen projects has presented a range of definitional questions that have proven tough to resolve.

Earlier in 2023, European Union (EU) policymakers finalized a pair of delegated acts appended to the recast Renewable Energy Directive after several rounds of revisions. These rules establish conditions for electrolytic hydrogen production to qualify as renewable, which determines whether projects can secure access to subsidies and contribute to renewable energy uptake targets in transportation and industry. So far, the EU and the UK are the only major economies to introduce detailed carbon intensity (CI) guidance for green hydrogen projects. Countries such as the US and India have provided CI thresholds for green hydrogen projects but have yet to determine the supporting methodology.

This Guidehouse Insights thought leadership paper summarizes the current status of CI criteria applied to green hydrogen projects in key global markets. It provides an overview of the core concepts involved, including the cost implications and CI impacts of producing hydrogen from various electricity sources, and the rationale for rules on additionality and geographic/temporal correlation. It also offers insights into the future development of CI rules, consequences for international trade, and the role of certification schemes.

Pages 16
Tables | Charts | Figures 6
  • How should rule makers determine that the electricity consumed by an electrolyzer is renewable, especially if drawn from the grid?
  • Are rules required to make sure green hydrogen projects do not divert renewable electricity away from decarbonizing existing electricity demand?
  • What guidelines should be applied to imports of hydrogen and derivative products such as ammonia or direct reduced iron?
  • What is meant by terms such as additionality, geographic correlation, and temporal correlation?
  • How do electrolyzer CAPEX, electricity sourcing costs, and plant capacity factors affect the levelized cost of hydrogen?
  • How will new carbon intensity rules in the EU affect global markets that export goods into Europe?
  • How will new carbon intensity rules in the EU affect regulations in other regions?
  • Policymakers and regulators
  • Green hydrogen producers
  • Renewable electricity providers
  • Electrolyzer manufacturers
  • European importers
  • Industrial energy users
  • Hydrogen certification bodies

About Us


Background & Context

EU Rules & Policies

International Outlook


Acronyms & Additional Resources


  • Levelized cost of hydrogen in a high electrolyzer CAPEX scenario
  • Levelized cost of hydrogen in a high electricity input cost scenario
  • Levelized cost of hydrogen in a low electrolyzer CAPEX scenario
  • Levelized cost of hydrogen in a low electricity input cost scenario
  • Comparison of capacity factor impacts on the levelized cost of hydrogen
  • Estimated minimum emissions intensity of green hydrogen, full lifecycle