## 7 Discussion
### Scale Economies and Production Costs of Green Hydrogen
This cost advantage positions these regions competitively for export markets, especially as the EU seeks cost-effective decarbonization pathways and large-scale investments in renewables to meet its greenhouse gas (GHG) reduction targets [65]. The comparative analysis of the economic viability of green hydrogen (and its synthetic derivatives) with fossil fuels is based on indicators such as the levelized cost of energy (LCOE) and the levelized cost of hydrogen (LCOH). Currently, renewable hydrogen production ranges from 4.45 to 10 USD/kg H\({}_{2}\), which is approximately two to four times higher than that of gray hydrogen, which has production costs ranging from 1 to 2.25 USD/kg H\({}_{2}\) through methane reforming or coal gasification processes. This highlights the challenges and opportunities for achieving cost parity. What is even worse, however, is that the levelized cost of e-fuels produced with renewable sources far exceeds current fossil fuel prices. While the production price of methanol from natural gas and coal ranges from 100 to 250 USD/t, e-methanol is estimated to reach values between 800 and 1600 USD/t. These costs could be affected if CO\({}_{2}\) was obtained through direct air capture technologies, as this would increase the cost of e-methanol to 1200-2400 USD/t. It is estimated that this cost could fall to 250-630 USD/t by 2050, driven by expected reductions in renewable energy generation prices in the coming years. The same applies to the production cost of e-ammonia, which is currently higher than that of fossil fuel-based ammonia (110-340 USD/t). The production cost of renewable ammonia is estimated to be between 720 and 1400 USD/t and is expected to fall to 310-610 USD/t by 2050. Green hydrogen accounts for over 90% of the total ammonia production cost, with the remaining small fraction attributed to nitrogen purification/separation and the Haber-Bosch process. However, the cost competitiveness of hydrogen applications is expected to improve substantially as the production scales increase and economies of scale materialize. Expanding generation capacity allows for spreading fixed costs across larger production volumes and improves operational efficiency, potentially resulting in unit reductions of up to 60-70%. Furthermore, the automation of gigawatt-scale electrolyzer manufacturing promises further cost reductions. Consequently, it is estimated that, over the next decade, green hydrogen costs could drop by up to 70%, to approximately 4.50 to 6.00 USD/kg, significantly approaching the competitiveness levels required to displace fossil fuels. The European Union has established certification schemes and \"green\" hydrogen thresholds to ensure that imported hydrogen meets strict sustainability and emission criteria. These schemes are designed to enhance the credibility and marketability of hydrogen exports to the EU. Alignment with these certification requirements is crucial for exporters, as it directly impacts the acceptance and value of GH2 in the European market. Providing transparent, verifiable information on the carbon intensity and lifecycle emissions of hydrogen is essential for meeting EU standards and gaining consumer trust [66]. In this regard, the roadmaps, plans, or laws that promote the development of green hydrogen projects must be aligned with national climate commitments (NDCs) and energy transition plans to ensure compliance with national emission reduction targets. In addition, they must consider financial support mechanisms to offset competitiveness gaps compared to fossil fuels, through either subsidies, differential tariffs, tax credits, etc. The Hydrogen Council estimates that approximately USD 70 billion is required for green hydrogen to achieve competitiveness compared to conventional fuels. This investment must be allocated across three fronts. The first is production and technology (USD 20 billion), which refers to the development and scaling of electrolyzers, carbon capture technologies,etc.