Hydrogen is indispensable for climate change mitigation; yet, it is unclear to what extent blue hydrogen from natural gas with carbon capture and storage will complement green hydrogen from renewable electricity. Today, green hydrogen costs are higher than those of blue hydrogen, and, despite huge cost reduction potential, it is uncertain when cost parity will be achieved. However, by combining data on costs and life-cycle emissions, we show that hydrogen’s competitiveness is increasingly determined by carbon costs associated with different life-cycle emissions across fuels. To become competitive, green hydrogen requires > 90% renewable electricity input, whereas blue hydrogen requires > 90% net CO2 capture rates and close-to-zero methane leakage. For a broad parameter range, we show that by 2035-40, green hydrogen can become the cheapest hydrogen option. Low-emission blue hydrogen may play a valuable role in bridging the scarcity of green hydrogen; yet, depending on regional circumstances it may have a limited window of competitiveness.