Why Grey, Blue and Green Hydrogen Labels Do Not Map Onto CBAM Numbers

The hydrogen industry increasingly uses labels such as grey, blue and green hydrogen to describe how hydrogen is produced and the associated climate impact. But these labels do not translate directly into a corresponding number under the European Union’s Carbon Border Adjustment Mechanism (CBAM).

For hydrogen producers and exporters, the key issue is therefore not simply whether a product is marketed as “green” or “blue.” What matters for CBAM is how the imported hydrogen is classified, where it was produced, which emissions are attributable under the CBAM methodology, and whether verified actual emissions or applicable default values are used.

Hydrogen Colours Describe Production Routes, Not CBAM Accounting Categories

The terms grey, blue and green hydrogen are primarily industry terminology.

Grey hydrogen is generally produced from fossil fuels, particularly natural gas, through processes such as steam methane reforming without carbon capture.

Blue hydrogen generally uses a fossil-based production process combined with carbon capture and storage (CCS), reducing the emissions released into the atmosphere.

Green hydrogen is generally produced through water electrolysis using renewable electricity.

These descriptions can provide a useful indication of the production pathway and potential carbon intensity. However, CBAM does not simply assign a fixed emissions number to hydrogen based on its colour.

The European Commission's CBAM documentation identifies hydrogen under CN code 2804 10 00. Hydrogen is treated as a simple CBAM good, meaning there are no relevant CBAM precursors whose embedded emissions have to be added to the hydrogen calculation.

This is the first reason the familiar colour system does not map neatly onto CBAM figures: CBAM starts with the customs classification and emissions methodology rather than the commercial colour label.

CBAM Uses Embedded Emissions Instead of Hydrogen Colours

The fundamental CBAM question is:

How many emissions are embedded in the imported hydrogen under the CBAM calculation methodology?

For hydrogen, the relevant greenhouse gas is carbon dioxide, and emissions are expressed in tonnes of CO₂ equivalent per tonne of hydrogen. The European Commission's methodology requires emissions to be associated with the specific production installation or production process.

This means two products both marketed as "blue hydrogen" could potentially have different CBAM emissions results.

The difference could arise from factors such as:

• the hydrogen production technology;

• the amount of natural gas consumed;

• the efficiency of the production process;

• the performance of the carbon capture system;

• emissions associated with process heat;

• methane or other upstream emissions where relevant to the applicable methodology;

• the actual installation-level emissions data; and

• whether actual verified data or default values are used.

Consequently, hydrogen colour is a description of the production pathway, whereas the CBAM figure is an accounting result.

Why Grey Hydrogen Does Not Automatically Equal One CBAM Number

Grey hydrogen is usually associated with relatively high emissions because fossil fuel is used as the feedstock and energy source.

However, CBAM does not simply state:

Grey hydrogen = X tonnes of CO₂e per tonne of hydrogen.

Instead, the emissions calculation is connected to the production installation and the applicable CBAM methodology.

This distinction matters because production facilities can have different efficiencies and operating conditions. A producer with a more efficient reforming process may have a different emissions intensity from another producer using a less efficient installation, even though both products would commonly be described as grey hydrogen.

Therefore, the colour label alone is insufficient to determine the final CBAM figure.

Why Blue Hydrogen Is Even More Difficult to Map

Blue hydrogen illustrates the problem particularly clearly.

The addition of CCS can significantly reduce emissions compared with unabated fossil-based hydrogen production. But simply calling the product "blue" does not establish how much CO₂ has actually been avoided or captured.

For CBAM purposes, the calculation must reflect the emissions attributable under the applicable methodology. The performance of the production and carbon-capture system can therefore affect the resulting emissions figure.

A blue hydrogen facility with a high capture rate and efficient process may have a substantially different emissions intensity from another facility marketed under the same blue-hydrogen label.

This creates an important compliance lesson:

CCS claims and hydrogen colour classifications should not be treated as substitutes for installation-level CBAM emissions data.

Green Hydrogen Does Not Automatically Mean Zero CBAM Emissions

Green hydrogen is generally associated with renewable-powered electrolysis and very low operational carbon emissions.

However, the statement "green hydrogen = zero CBAM emissions" should not automatically be made.

CBAM accounting is governed by its own methodology. During the transitional period, hydrogen producers reported both direct and indirect emissions, with indirect emissions covering electricity consumption. The European Commission states that, from the definitive regime beginning in 2026, CBAM for hydrogen is limited to direct emissions.

This is an important change.

An electrolyser may use renewable electricity and therefore have very low direct emissions at the production site. But the commercial claim that the hydrogen is "green" and the number ultimately used for CBAM purposes are two different concepts.

The applicable CBAM methodology and evidence supporting the emissions calculation determine the compliance figure.

The Same Hydrogen CN Code Can Cover Different Production Routes

Another reason colour labels do not map directly onto CBAM numbers is that CBAM's customs classification does not create separate CN codes for grey, blue and green hydrogen.

The relevant hydrogen product is classified under:

CN 2804 10 00 – Hydrogen

The European Commission's hydrogen guidance identifies multiple production routes, including steam reforming, partial oxidation, water electrolysis and other electrolysis-based routes.

Therefore, the customs classification can remain the same while the production technology and emissions profile differ significantly.

In simple terms:

One CBAM product classification ≠ one hydrogen production pathway ≠ one fixed emissions value.

Default Values Can Make the Difference Even More Visible

The issue becomes particularly important when importers do not use verified actual emissions.

For the definitive CBAM regime, the European Commission has published country-specific default values and benchmarks. The Commission states that the legally binding default values are established through the relevant implementing regulation, with corrected values published in 2026.

These values are not simply a colour-based scale of:

• grey = high;

• blue = medium;

• green = low.

Instead, the system can use country- and product-specific default values where applicable.

For example, publicly compiled data based on the 2026 EU default-value regulation shows different hydrogen default values for different countries under CN 2804 10 00. The figures are expressed in tonnes of CO₂e per tonne of hydrogen and can therefore differ even though the product classification remains hydrogen.

This demonstrates why exporters should not attempt to calculate CBAM exposure solely from a hydrogen colour label.

CBAM Numbers Are Also Linked to the Benchmark System

CBAM exposure is not determined only by the emissions number attached to an imported product.

The definitive regime also uses CBAM benchmarks and other elements of the certificate calculation. The European Commission published the definitive CBAM benchmarks in 2026, while the legally applicable default values are established through implementing legislation.

This creates a more complicated relationship:

Production route → installation emissions → CBAM emissions calculation → applicable default/actual data → benchmark and other CBAM calculation elements → financial exposure

The hydrogen colour sits outside this calculation chain.

It can be useful for describing the technology, but it is not itself the CBAM calculation input.

Why Actual Verified Data Matters for Hydrogen Exporters

For exporters, the most important practical consequence is that relying on a marketing label can create compliance problems.

A producer exporting hydrogen to the EU should maintain reliable records covering the production process and emissions data required by the CBAM methodology.

Under the current system, non-EU installation operators monitor and calculate embedded emissions according to the CBAM methodology. Accredited CBAM verifiers review the monitoring approach, calculations and supporting evidence before verified emissions can be used by declarants.

This makes documentation increasingly important for hydrogen projects seeking access to the European market.

For example, a producer describing hydrogen as "green" should be able to substantiate the relevant production and emissions information rather than relying only on the green-hydrogen label.

Similarly, a blue-hydrogen producer needs evidence supporting the emissions calculation and the relevant production process rather than assuming that the word "blue" corresponds to a predetermined CBAM value.

What Hydrogen Producers Should Track

To prepare for CBAM compliance, hydrogen producers and exporters should build their emissions-data systems around the CBAM methodology rather than around colour terminology.

Important information can include:

Production quantity

Hydrogen quantities should be measured in metric tonnes of pure hydrogen for CBAM reporting purposes.

Production route

The producer should clearly document whether hydrogen is produced through steam reforming, partial oxidation, electrolysis or another applicable route.

Installation-level emissions

The emissions calculation should be connected to the installation or production process rather than relying on a generic colour-based emissions assumption.

Energy and process data

Fuel consumption, process conditions and other relevant operational data should be recorded consistently to support the emissions calculation.

Verification evidence

Where actual emissions are used, the supporting monitoring system and evidence need to be robust enough for the applicable CBAM verification process.

What This Means for EU Hydrogen Importers

EU importers should also be careful when receiving emissions information from suppliers.

A supplier statement saying "100% green hydrogen" or "blue hydrogen with CCS" may be useful commercially, but it should not automatically be treated as a CBAM emissions value.

The importer needs the information required under the CBAM framework to establish the emissions associated with the imported product.

The CBAM Registry now supports functions including authorisations, reporting obligations and emissions-data submissions for relevant stakeholders.

As the definitive regime introduces a financial consequence for embedded emissions, the quality of the underlying emissions data becomes much more important than it was during the transitional reporting period. The European Commission specifically highlighted this shift in its September 2026 CBAM implementation webinar.

The Key Distinction: Hydrogen Colour vs CBAM Classification

The simplest way to understand the issue is to separate three different concepts.

Hydrogen colour describes the production pathway or sustainability characteristic used by the hydrogen industry.

CN classification determines how the product is identified for customs and CBAM scope purposes.

CBAM emissions value represents the emissions calculated under the EU's prescribed methodology.

These three concepts can be related, but they are not interchangeable.

A producer may therefore have:

Green hydrogen → CN 2804 10 00 → CBAM emissions calculated under the applicable methodology

rather than:

Green hydrogen → fixed "green hydrogen" CBAM number

The same principle applies to grey and blue hydrogen.

Why This Matters as Hydrogen Trade Expands

The distinction will become increasingly important as hydrogen, ammonia and low-carbon industrial products develop international supply chains.

Hydrogen can be used directly or as a feedstock for products such as ammonia and can also support industrial applications including direct reduced iron. The European Commission identifies hydrogen as a CBAM good in its own right and also recognises its role as a relevant input in other industrial processes.

For exporters targeting the EU, demonstrating the actual emissions profile of production can therefore become a competitive factor alongside the technology label.

The commercial message is straightforward:

Do not build a CBAM strategy around hydrogen colours. Build it around the emissions data that CBAM actually recognises.
Sources:

https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism/cbam-sectors_en?