What are decarbonised fuels and what need do they meet?

Economy Green hydrogen

The objective of both the Paris Agreement and the commitments being made by Europe is that of an emission-free society by 2050. By then, the energy carriers will have to be fully decarbonised, meaning there will no place for the fossil fuels being used today.


Oil and natural gas will have to be replaced by carbon-neutral alternatives. It is therefore essential to identify the origin of fuels and the emissions generated in their processing so as to ensure that only those with a carbon-free footprint are used on a massive scale:


  • Grey hydrogen (grey H2): methane originating from fossil fuels (mainly natural gas or coal) is made to react with water vapour under high pressure and at high temperature. This is a very mature and competitive technology that is used to obtain practically all the hydrogen produced in the world today. It is not a decarbonised gas because emissions are generated during the process.
  • Blue hydrogen (blue H2): this is obtained in the same way as grey H2, with the difference being the addition of a subsequent CO2 capture and storage process, known as CCS, to reduce the carbon footprint by up to 90 % at best. Being a partially decarbonised gas whose use is not compatible with a carbon neutral system, blue H2 could, in some cases, be considered a transitional alternative.


  • Biogas: this gas is obtained from the controlled decomposition of organic material, such as forestry waste or the organic waste collected in the brown containers found in our towns and cities, which produces a mixture of methane, CO2 and other gases. Biogas is a decarbonised gas because, although emissions are produced during its combustion process, these are lower than those avoided by allowing the organic matter to degrade naturally.
  • Biomethane: this is obtained by using a process that cleans biogas by removing the CO2 and other impurities, leaving the purest methane, similar to natural gas. Just like biogas, biomethane is considered to be a decarbonised gas.

Biogas and biomethane are likely to be used as fuels locally near the place of production as their transport is very expensive. Their potential is constrained by the availability of raw materials.

  • Biodiesel and bioethanol: these are liquid fuels obtained from raw materials such as sugar or vegetable oil. This is a mature and extensively used technology, as they make up between 5 % and 10 % of the fuels used by petrol and diesel-driven vehicles. They do not qualify as decarbonised fuels because the raw material for these fuels competes with food by requiring the deforestation of fertile land.
  • Advanced biofuels: these are liquid fuels obtained from biomass or wood waste that are not in competition with the food industry. These fuels count as decarbonised liquid fuels.


types of fuels


  • Green hydrogen (green H2): the water molecule is broken down using electrolysis created with 100 % renewable electricity to obtain hydrogen. This process does not generate CO2 emissions and the resulting hydrogen is, therefore, a totally decarbonised gas. This is a relatively immature technology, especially on a large scale, with an efficiency loss of 30 %, which is why it is currently being used extremely sparingly.
  • Green hydrogen derivatives: decarbonised fuels can be obtained from the green hydrogen (green H2) in the form of a gas (synthetic methane) or liquid (synthetic kerosene, petrol or diesel). These processes require technologies that are still very much in their infancy, and this makes them significantly more expensive.


By being the most competitive and efficient, the direct electrification of the economy using renewable energy is today the best option for decarbonisation. There are however niches (such as shipping, aviation and high-temperature industries) that make up less than 15 % of the EU's final consumption and emissions for which, as of today, electrification is not yet competitive or technically possible. This is why the Iberdrola group is pressing for:

  • The use of decarbonised fuels in the consumption niches in which direct electrification is not possible or competitive.
  • Making the most of all the potential that the organic-based fuels have to offer as these are renewable options that improve the circular economy and help towards the development of rural areas.
  • The promotion of pilot R&D projects focusing on the immature technologies and encouraging industry to consume hydrogen as a raw material.

Iberdrola, is already a pioneer in the renewables movement, is launching a large-scale green hydrogen project based on photovoltaic energy in Puertollano and, by 2030, it expects to produce 85,000 tonnes of green H2.

  What is Green Hydrogen?