Green and sustainable hydrogen has a major role in moving towards decarbonization of energy, providing viable solutions in all most challenging sectors of the national economies. It would penetrate practically all sectors of economic activity, such as long-haul transport, steel and chemical industries, power generation and energy storage. Green and sustainable hydrogen cost competitiveness is also closely linked to developments of large-scale renewable energy sources (in case of green hydrogen; hereinafter – RES) and further commercialization of carbon dioxide (in case of sustainable hydrogen produced from natural gas; hereinafter – CO2) capture and storage (hereinafter – CCS) technologies.In the European Union (hereinafter – EU), sustainable and especially green hydrogen is gaining strong political and business momentum, emerging as one of major components in governments’ net zero plans within the European Green Deal and beyond. Being extremely versatile both in production and consumption sides, it is light, storable, has high energy content per unit mass and can be readily produced at an industrial scale. The key challenge comes from the fact that hydrogen is the lightest known chemical element and so has a low energy density per unit of volume, making some forms of long-distance transportation and storage complex and costly. In this paper, green and sustainable hydrogen is reviewed as a vital part of emerging Euro-pean smart energy framework, which could contribute significantly to economy decarboniza-tion agenda of the EU and Latvia in both in short- and mid-term perspective.