Is Green Hydrogen a Strategic Opportunity for Albania? A Techno-Economic, Environmental, and SWOT Analysis

Hydrogen is increasingly recognized as a clean energy vector and storage medium, yet its viability and strategic role in the Western Balkans remain underexplored. This study provides the first comprehensive techno-economic, environmental, and strategic evaluation of hydrogen production pathways in Albania. Results show clear trade-offs across options. The levelized cost of hydrogen (LCOH) is estimated at 8.76 €/kg H2 for grid-connected, 7.75 €/kg H2 for solar, and 7.66 €/kg H2 for wind electrolysis—values above EU averages and reliant on lower electricity costs and efficiency gains. In contrast, fossil-based hydrogen via steam methane reforming (SMR) is cheaper at 3.45 €/kg H2, rising to 4.74 €/kg H2 with carbon capture and storage (CCS). Environmentally, Life Cycle Assessment (LCA) results show much lower Global Warming Potential (<1 kg CO2-eq/kg H2) for renewables compared with ~10.39 kg CO2-eq/kg H2 for SMR, reduced to 3.19 kg CO2-eq/kg H2 with CCS. However, grid electrolysis dominated by hydropower entails high water-scarcity impacts, highlighting resource trade-offs. Strategically, Albania’s growing solar and wind projects (electricity prices of 24.89–44.88 €/MWh), coupled with existing gas infrastructure and EU integration, provide strong potential. While regulatory gaps and limited expertise remain challenges, competition from solar-plus-storage, regional rivals, and dependence on external financing pose additional risks. In the near term, a transitional phase using SMR + CCS could leverage Albania’s gas assets to scale hydrogen production while renewables mature. Overall, Albania’s hydrogen future hinges on targeted investments, supportive policies, and capacity building aligned with EU Green Deal objectives, with solar-powered electrolysis offering the potential to deliver environmentally sustainable green hydrogen at costs below 5.7 €/kg H2.