On the macroeconomic and societal ramifications of green hydrogen policies — The case of Greek transport sector

Green hydrogen has emerged as a key tool for decarbonizing hard-to-abate sectors and stabilizing variable power generation. However, its diffusion can raise energy costs, thereby leading to adverse economy-wide impacts. A gap exists in the literature concerning the evaluation of green hydrogen's macroeconomic impact in countries with both high potential for hydrogen production and structural economic challenges. This paper addresses this gap by examining the macroeconomic footprint of green hydrogen diffusion in the Greek transport sector over 2030–2050, considering various scenarios concerning which economic agents undertake implementation costs. We employ an integrated modelling framework composed of a technology-rich optimization model for power generation and transportation planning in Greece, OSeMOSYS-PORTAGE, and a general equilibrium model illustrating the interactions between domestic and global economic agents, GTAP-Greece, coupled to the GTAP database version 11. The results indicate that when domestic economic agents fully cover the costs, a moderate negative impact (∼1.5 % in 2050) is induced on the Greek economy, unveiled less intensely when households alone finance these costs. Conversely, if the costs transferred to households are alleviated through an external to the economy grant, a profound expansionary effect (∼2.5 % in 2050) emerges, albeit at the expense of the economy's competitiveness and extroversion.