"Not quite sure why 'tension arises' as per the headline..."

Charlie, the article explains why:

"The EC proposes cofunding any blue hydrogen project in which roughly 90% of the CO2 is captured and stored. But such a policy would be a “huge mistake” because it would divert resources from green hydrogen, according to the European Environmental Bureau, which represents more than 140 environmental organizations across Europe."

'Investing in fossil-based hydrogen, whose production is already available at industrial scale, risks making truly clean and fossil-free hydrogen uncompetitive for the EU market,' Barbara Mariani, the bureau’s senior policy officer, says in a statement."

I suppose tension arises because truly clean and fossil-free hydrogen, supported by 140 environmental organizations across Europe, is an unsupportable fantasy:

1. Never has a fuel produced anywhere in the world "captured and stored" 90% of the CO2 involved in its production process. Why? It's impractical, it's expensive, and it creates even more CO2 than not capturing and storing it at all.
2. What would Saudi Arabia have to gain by a process that doesn't burn more fossil fuel than it saves? Mideastern caliphates aren't particularly known for giving money away (unless a gold-plated Lamborghini has been offered in exchange).
3. In the production's flowchart below, wind and solar are only counted on to provide power for electrolysis and separating nitrogen from the air. What is powering ammonia production, distribution, disassociation, and hydrogen compression? Somehow, we're supposed to believe after burning hydrocarbons to power four steps of this six-step process we'll end up with "carbon-free hydrogen":

The tension, apparently, is between proponents of blue vs. green hydrogen in the EU. Green hydrogen proponents want all of the EU hydrogen-related subsidies to be devoted to electrolytic (green) hydrogen. They don't want any funding diverted to support CCS and blue hydrogen. 

The proponents of green hydrogen are the wind and solar industries along with manufacturers of electrolysis equipment. So of course they'd like to have all the subsidies sent their way. But that's a foolish, counterproductive position, in my opinion.

For economic reasons, facilities for producing green hydrogen will draw power primarily from the grid. Given the inefficiencies of electrolysis and the current mix of generation resources on the grid, production of green hydrogen will actually consume more coal and natural gas than reforming would. And none of the carbon emissions will be captured and stored. If restrictions are imposed to limit electrolysis to periods where there are surplus supplies of wind and solar energy available, the cost of production will be too high and the volumes too low to seed the applications hydrogen needs in order to succeed.

The good news for the hydrogen fuel industry is 1) a major fossil fuel player (in Saudi Arabia) thinks it's real enough to be investment worthy, and 2) the technology mix is moving towards having an ammonia component.

I've always said that any forecasts that assuming the fossil fuel industry will disappear in our lifetime is nothing more than wishful thinking.  Fossil based H2 with CC&S provides a scenario in which fossil fuel companies can co-exist with a low emissions future. The economics may work out, since the product is made from one of the cheapest fuels (fossil gas), and would compete against more expensive fuels (gasoline and diesel), plus it would have the market appeal of being blended with some portion “made from sunshine”.

Any system that wants to have a significant portion of the H2 produced using off-peak clean electricity has to have a seasonal energy storage capability, since demand for electricity is highly seasonal in places that comprise most demand.  Ammonia is much easier to store (and transport) than H2, so it is a better choice for that seasonal component in many locations. 

The ammonia solutions that seem closest to market utilize ammonia-to-hydrogen converters at hydrogen refueling stations, which substitute truck delivery of liquid ammonia for any sort of hydrogen delivery.  So the green H2 folks will have to come up with their own distribution system, or get on board the ammonia train.

I also find it ironic that the two examples in the graphic of H2 end-users, trucks and buses, are also examples of potential end users for ammonia as a carbon-free fuel (because they have professional operators who can be trained to handle such a toxic fuel safely).  Ammonia can be burned with around 50% efficiency in specially optimized internal combustion engines, so these applications can use ammonia directly and avoid the cost of fuel cells and inconvenience of H2 storage.c