Common Contracts
1 similar Carbon Contract for Differences contracts
Carbon Contract for Differences for the development of low-carbon hydrogen in Europe∗Carbon Contract for Differences • December 16th, 2021
While developing a low-carbon hydrogen economy in the European Union is cur- rently an energy transition keystone, electrolysis based production is not yet competitive compared to steam reforming. This study aims to characterize a new political tool, the Carbon Contract for Difference (CCfD), in the specific case of scaling up electrolysis based hydrogen production. Our analysis suggests that an economically efficient CCfD can be defined for each area with homogeneous electricity mix. This CCfD should be designed depending on the gas prices and the current State aids being used in the EU-ETS system. This paper offers a methodology for policy makers to design CCfD according to their region and the sector application.
