Green Hydrogen in Greece: High Carbon Costs Needed for Investment Viability

Greece, like Europe, aims to develop green hydrogen, produced using electricity from renewable sources such as wind and solar. However, Greek experts believe that without government subsidies, a very high carbon emission allowance price will be necessary to make green hydrogen investments worthwhile. This cost is borne by entities emitting CO2 into the atmosphere, including fossil fuel power plants and industries. The next phase of the European Emissions Trading System (ETS 2.0) is expected to significantly increase carbon prices compared to current levels. Market estimates suggest that green hydrogen requires a carbon price of €140 per ton, up from today’s €73, to become commercially viable and competitive. This substantial difference highlights the gap between this green fuel and its conventional counterpart based on natural gas. The exact carbon prices will significantly impact the Greek economy; ‘dirty’ sectors will face high costs, while those opting for green investments will receive a significant boost. This is where the investment rationale behind hydrogen lies. As Professor Pantelis Kapros of NTUA mentioned at yesterday’s Hydrogen & Green Gases Forum, a key issue for green hydrogen in Greece is the government’s decision to end all subsidies for emerging energy technologies. The Ministry of Environment and Energy took this step to limit the cost of the green transition for consumers following the 2022 energy crisis. However, Prof. Kapros noted that these are not traditional subsidies but developmental support measures designed to provide investors with visibility to drive market progress and secure future benefits for Greece. According to the professor, the government has neglected its developmental role, impacting not only hydrogen but also other technologies such as batteries, offshore wind farms, heat pumps, and more.