Hydrogen Comes in a Palette
When you hear the word “hydrogen,” you imagine a colorless gas. But on the European market, hydrogen is anything but colorless — it comes in a palette of colors that determine its price, regulatory status, and market acceptance. The color of hydrogen is not a marketing gimmick; it is a label of the production process that today can be worth millions of euros in premiums, grants, or penalties.
For managers in Serbia considering entry into the hydrogen economy, understanding the color palette is step one. Not because the shades themselves matter, but because the European Commission pays only for certain colors — and CBAM penalizes others.
Gray Hydrogen: Dominant, Cheap, Dirty
Today’s global hydrogen market is almost entirely gray. Gray hydrogen is produced through steam methane reforming (SMR), a process in which methane reacts with steam. The result: hydrogen plus roughly 9–11 kg of CO2 per kilogram of H2 produced.
The price of gray hydrogen in Europe today ranges between EUR 1.5 and EUR 3 per kg, making it the cheapest on the market. That is why refineries, fertilizer producers, and chemical plants — including NIS Pančevo, HIP Azotara, and MSK Kikinda — have been using it for decades without considering alternatives.
The problem: once CBAM enters full application, gray hydrogen ceases to be cheap. It becomes a hidden cost embedded in every exported product.
Blue Hydrogen: Compromise or Transition?
Blue hydrogen is gray hydrogen plus carbon capture and storage (CCS). The process is identical, but CO2 is not released into the atmosphere — it is captured and pumped into underground formations.
The price is higher (~EUR 2.5–4 per kg), and capture rarely exceeds 85–95% efficiency. The European Union conditionally accepts it as a transition fuel, but not as part of its 10 Mt renewable production target for 2030. Under RFNBO rules — it does not count.
Green Hydrogen: The Premium Product
Green hydrogen is produced through water electrolysis using electricity from renewable sources — solar, wind, hydropower. Emissions are practically zero, provided the electricity is truly green under RFNBO additionality and temporal correlation rules.
Today it costs roughly EUR 6–10 per kg in Europe, three to four times more than gray. But green hydrogen is the only color that:
- counts toward the EU’s 10 Mt 2030 target
- qualifies for European Hydrogen Bank auction grants
- avoids CBAM
- can be sold to industrial buyers at premium prices as part of a “decarbonization package”
Pink, Turquoise, White: The Colors Yet to Come
Pink (or purple) hydrogen is water electrolysis powered by nuclear energy. The EU recognized it in 2024 as low-carbon under specific conditions. For Serbia, with its announced nuclear program and the role of the Vinča Institute, this will become politically relevant in 5–10 years.
Turquoise hydrogen comes from methane pyrolysis — thermal decomposition of natural gas into hydrogen and solid carbon (instead of CO2). The carbon byproduct has market value (carbon black, tires, batteries). The technology is still early-stage but has significant potential.
White hydrogen is naturally occurring hydrogen already present in the Earth’s crust. Discoveries in Mali and France in 2024–2025 opened a new category that, if confirmed at commercial scale, could change the entire palette.
What This Means for Serbian Industry
Serbian industry today uses almost exclusively gray hydrogen. The question is not whether it will need to switch to green or blue, but when and who moves first. CBAM is entering full application, and Serbian exporters of steel, fertilizers, and petrochemicals have only a few years before gray hydrogen in their products becomes expensive ballast.
The smartest management approach: conduct a “color audit” now — determine how much gray hydrogen the company uses annually, what its CO2 footprint is, and what CBAM will cost under different scenarios. Only after that calculation does it make sense to discuss a green project.
Conclusion: Color Is Strategy, Not Aesthetics
The color of hydrogen is not an aesthetic choice — it is a business position. Gray is a present the EU is quickly penalizing. Blue is a compromise that may not be enough. Green is expensive but the only one earning grants and premium buyers. Pink and turquoise are options for the next decade.
For managers planning investments with a 10+ year horizon, the color of hydrogen is equivalent to asking which currency you operate in. And that is not a question you can postpone.
