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The European Union is committed to a 55% reduction in greenhouse gas emissions by 2030, as outlined in the Green Deal and Climate Law initiatives. In response to geopolitical events, the RePowerEU initiative aims to enhance energy self-sufficiency, reduce reliance on Russian natural gas, and promote hydrogen utilization. Hydrogen valleys, localized ecosystems integrating various hydrogen supply chain elements, play a key role in this transition, particularly benefiting isolated regions like islands. This manuscript focuses on optimizing a Centralized Green Hydrogen Production Facility (CGHPF) on the island of Crete. A mixed-integer linear programming framework is proposed to optimize the CGHPF, considering factors such as land area, wind and solar potential, costs, and efficiency. Additionally, an in-depth sensitivity analysis is conducted to explore the impact of key factors on the economic feasibility of hydrogen investments. The findings suggest that hydrogen can be sold in Crete at prices as low as 3.5 EUR/kg. Specifically, it was found in the base scenario that, selling hydrogen at 3.5 EUR/kg, the net profit of the investment could be as high as EUR 6.19 million, while the capacity of the solar and wind installation supplying the grid hydrogen facility would be 23.51 MW and 52.97 MW, respectively. It is noted that the high profitability is justified by the extraordinary renewable potential of Crete. Finally, based on our study, a policy recommendation to allow a maximum of 20% direct penetration of renewable sources of green hydrogen facilities into the grid is suggested to encourage and accelerate green hydrogen expansion. [ABSTRACT FROM AUTHOR]

The European Green Deal aims to put the EU on track towards climate neutrality by 2050. One of the key elements is a more stringent greenhouse gas emission reduction target of 55% below 1990 levels by 2030. We analyse the socio-economic consequences of alternative policy pathways to reach that target, either relying more on regulatory standards, on carbon pricing, or a mix of both. We develop a modelling framework that captures macro-economic and sectoral impacts and closely aligns economic and energy system modelling. We further decompose aggregate labour market outcomes into skill and occupation types, and downscale representative household results to micro-level household data to evaluate the distributional effects across income groups with heterogeneous expenditure patterns. By combining models and datasets, our framework enables incorporating a high degree of technological detail while revealing socio-economic aspects of the transition that may go unnoticed in coarse, aggregate assessments. In particular, our results highlight the heterogeneous impacts of climate policy across sectors, worker skill types and income groups, which may require particular attention in climate policy design and corresponding complementary measures to ensure a fair transition to a low-carbon economy. • We assess different policy packages to achieve stricter EU 2030 climate targets. • A framework for climate policy assessment needs to be both broad and detailed. • We develop such a framework by linking energy models with economic models and data. • We downscale aggregate results for labour markets and household consumption. • Results illustrate model uncertainty and policy design potential to alter outcomes. [ABSTRACT FROM AUTHOR]