Can blue and turquoise hydrogen meet the EU’s new low-carbon threshold?

The EU has introduced a common methodology for determining whether fuels qualify as low carbon.

A new Frontier Economics study for the German Technical and Scientific Association for Gas and Water (DVGW) examines what the rules mean in practice for blue and turquoise hydrogen, and whether the current framework provides the right incentives for these technologies to contribute to Europe’s hydrogen transition.

Under Delegated Regulation (EU) 2025/2359, fuels must achieve greenhouse gas (GHG) savings of at least 70% compared with a fossil fuel comparator to qualify as low carbon. For hydrogen, this corresponds to a maximum lifecycle emissions intensity of around 101.5 kgCO2e/MWh. The calculation covers the full value chain, including natural gas production and transport, hydrogen production, transport and storage and, for blue hydrogen, carbon capture and storage.

We analysed blue and turquoise hydrogen produced in Germany using three representative natural gas supply routes: LNG from the US, LNG from Qatar and pipeline gas from Norway.

The methodology can materially affect the results

A key issue is how upstream natural gas emissions are calculated. For important parts of the natural gas supply chain, the Regulation requires standard values rather than allowing producers to use their actual emissions. Methane emissions can be calculated using pathway-specific data where suitable data are available.

Our analysis therefore compares a fully pathway-specific benchmark with a hybrid approach, which combines pathway-specific methane emissions with mandatory standard values for other upstream emissions, and a standard-value approach. The fully pathway-specific calculation is shown for comparison only and cannot currently be used in full for certification.

The standard values are not regionally differentiated, despite substantial differences in actual emissions. For Norwegian pipeline gas, for example, the standard-value approach assigns more than five times the emissions estimated under a pathway-specific calculation. This can disadvantage lower-emission supply chains and weaken incentives to reduce upstream emissions.

What does this mean for blue and turquoise hydrogen?

For blue hydrogen, upstream natural gas emissions are the main driver. Under current conditions, the LNG routes from the US or Qatar exceed the low-carbon threshold in all cases considered, with lifecycle emissions around 40% to 70% above the threshold. Norwegian pipeline gas performs much better: based on a fully pathway-specific calculation, it already falls below the threshold. However, the hybrid approach brings it close to the threshold, while the full standard-value approach pushes it above the threshold.

Figure 1 - Total lifecycle emissions of blue hydrogen by supply route and calculation method (2025/current conditions)

Source: Frontier Economics

Note: SMR = steam methane reforming. The hybrid scenario combines a pathway-specific methane intensity with mandatory standard values for CO₂ and N₂O emissions from natural gas production, processing and pipeline transport.

For turquoise hydrogen, electricity is the key factor because methane pyrolysis is highly electricity intensive. With today's grid electricity, none of the routes assessed meets the threshold. With electricity that qualifies as fully renewable and emissions-free under the Regulation, several routes can already meet it.

Emissions could fall substantially over time. The study identifies lower methane emissions, cleaner process electricity, electrified LNG liquefaction and improved treatment of CO₂ in raw gas as key levers. Under an ambitious but plausible medium-term scenario, blue hydrogen emissions fall by around half, while turquoise hydrogen can achieve GHG savings of more than 85% relative to the fossil comparator.

What needs to change?

The Delegated Regulation is an important step towards a common EU framework for low-carbon fuels. But our analysis suggests that the current framework is unlikely to provide a strong enough market signal for blue and turquoise hydrogen. Two issues stand out.

First, mandatory standard values can fail to reflect real differences in emissions and therefore weaken incentives to reduce them. Second, LCF certification currently has limited practical value because low-carbon fuels are not embedded in EU targets and quotas to the same extent as renewable fuels. Our study therefore recommends:

• Make the methodology better reflect actual emissions. Pathway-specific calculations should be allowed where robust data are available, with regionally differentiated and regularly updated standard values as a fallback. Practical approaches such as certificates or trace-and-claim should support supply-chain tracking.

• Give LCF certification greater practical relevance. Certified low-carbon fuels should have a clearer role in decarbonisation frameworks, for example in transport and industry, without reclassifying them as renewable energy.

More information on the study can be found on the DVGW-website