What is the current cost of blue hydrogen in the U.S. Gulf Coast
ects that we are actively working on today that are getting some preferential positioning as far as some European funding is concerned as well. Those will then move from 50 units of two megawatts, which you can imagine on the most efficient structure, to maybe five units or 20 units of five megawatts or five units of 20 megawatts as scale-up happens along the way. So the fact that, that scale up is happening, the fact that the technology road map is providing that capital efficiency and economies of scale is happening right now and preparing us for what's likely to happen in the next five years. I don't want to speculate at this stage as to what that likely backlog might look like five years down the road, but clearly, I'm encouraged by the developments I see.
P.J. Juvekar -- Citi -- Analyst
Great. Thank you for the detailed answer. As you look at this technology road map and green hydrogen costs coming down, where do you see that? I know Steve had commented on some numbers maybe a year ago. And what about this production tax credit of $3 for green hydrogen? How would that play out?
Sanjiv Lamba -- Chief Operating Officer
P.J., that production tax credit is actually very, it will be a very good supporting mechanism. We talked earlier on about in the previous question about how we see the incentives support the development, that $3 per kg will be a good support mechanism. We obviously have to read the rules and it hasn't yet come through. So I'm looking with some eagerness to that coming through and getting an understanding of how that, how those rules come into play. But that would be encouraging. Clearly, we believe that there is an opportunity here for us to move forward. Steve mentioned to you in the past that if we get hydrogen, blue or green, green, obviously more challenged in this reference, at about between $1 to $2 per kg, it's at that point that you see an inflection point and you see widespread adoption of technologies utilizing hydrogen and really hydrogen becoming a reasonable fuel in the portfolio fuels we'll have. We'll always have fossil fuel, at least for many decades ahead. But it will be a more important part of that portfolio of fuels and energy basket as it will. Steve, do you want to add something?
Stephen F. Angel -- Chief Executive Officer and Director
Okay, Sanjiv, I'll add something. So yes, just to build on that, I mean, if you were to look at the cost of hydrogen today and you were to use the U.S. Gulf Coast, which obviously, we produce a lot of hydrogen, we use a lot of hydrogen in the U.S. Gulf Coast. Gray hydrogen is about $1.30 a kilogram, and that's at $5.50 natural gas. Carbon capture would add another $0.40, $0.50, maybe you're in the $1.7 range sort. And if you think about green, it's like about $4.5 a kilogram. And out of that, probably $2.50, you call it, is the renewable power cost. And so if renewable power was free, then you would still have $2. And we all know renewable power isn't free. So we have some work to do to bring those costs down in terms of capital costs, operating costs. And as you were to work that down below that $2 number, then you've got a chance to have something competitive. So you need the combination of low cost renewable, low cost capital, lower cost, operate low cost capital and better efficiencies and then you can drive that number lower. And I would say ideally below $2, but certainly in that range would be is what's needed.
Operator
And our last question comes from Vincent Andrews with Morgan Stanley.
Juan Pelaez -- Head of Investor Relations
David, it looks like he has an issue. I think with that, we can wrap it up. For everyone on the line, thank you so much for attending today's call. For your reference, a copy of our transcript will be posted on our website within the next 24 hours. Thank you for listening. And anything else, let me know. Take care.
Operator
[Operator Closing Remarks]
Duration: 64 minutes
Call participants:
Juan Pelaez -- Head of Investor Relations
Stephen F. Angel -- Chief Executive Officer and Director
Sanjiv Lamba -- Chief Operatin
ects that we are actively working on today that are getting some preferential positioning as far as some European funding is concerned as well. Those will then move from 50 units of two megawatts, which you can imagine on the most efficient structure, to maybe five units or 20 units of five megawatts or five units of 20 megawatts as scale-up happens along the way. So the fact that, that scale up is happening, the fact that the technology road map is providing that capital efficiency and economies of scale is happening right now and preparing us for what's likely to happen in the next five years. I don't want to speculate at this stage as to what that likely backlog might look like five years down the road, but clearly, I'm encouraged by the developments I see.
P.J. Juvekar -- Citi -- Analyst
Great. Thank you for the detailed answer. As you look at this technology road map and green hydrogen costs coming down, where do you see that? I know Steve had commented on some numbers maybe a year ago. And what about this production tax credit of $3 for green hydrogen? How would that play out?
Sanjiv Lamba -- Chief Operating Officer
P.J., that production tax credit is actually very, it will be a very good supporting mechanism. We talked earlier on about in the previous question about how we see the incentives support the development, that $3 per kg will be a good support mechanism. We obviously have to read the rules and it hasn't yet come through. So I'm looking with some eagerness to that coming through and getting an understanding of how that, how those rules come into play. But that would be encouraging. Clearly, we believe that there is an opportunity here for us to move forward. Steve mentioned to you in the past that if we get hydrogen, blue or green, green, obviously more challenged in this reference, at about between $1 to $2 per kg, it's at that point that you see an inflection point and you see widespread adoption of technologies utilizing hydrogen and really hydrogen becoming a reasonable fuel in the portfolio fuels we'll have. We'll always have fossil fuel, at least for many decades ahead. But it will be a more important part of that portfolio of fuels and energy basket as it will. Steve, do you want to add something?
Stephen F. Angel -- Chief Executive Officer and Director
 Okay, Sanjiv, I'll add something. So yes, just to build on that, I mean, if you were to look at the cost of hydrogen today and you were to use the U.S. Gulf Coast, which obviously, we produce a lot of hydrogen, we use a lot of hydrogen in the U.S. Gulf Coast. Gray hydrogen is about $1.30 a kilogram, and that's at $5.50 natural gas. Carbon capture would add another $0.40, $0.50, maybe you're in the $1.7 range sort. And if you think about green, it's like about $4.5 a kilogram. And out of that, probably $2.50, you call it, is the renewable power cost. And so if renewable power was free, then you would still have $2. And we all know renewable power isn't free. So we have some work to do to bring those costs down in terms of capital costs, operating costs. And as you were to work that down below that $2 number, then you've got a chance to have something competitive. So you need the combination of low cost renewable, low cost capital, lower cost, operate low cost capital and better efficiencies and then you can drive that number lower. And I would say ideally below $2, but certainly in that range would be is what's needed.
Operator
And our last question comes from Vincent Andrews with Morgan Stanley.
Juan Pelaez -- Head of Investor Relations
David, it looks like he has an issue. I think with that, we can wrap it up. For everyone on the line, thank you so much for attending today's call. For your reference, a copy of our transcript will be posted on our website within the next 24 hours. Thank you for listening. And anything else, let me know. Take care.
Operator
[Operator Closing Remarks]
Duration: 64 minutes
Call participants:
Juan Pelaez -- Head of Investor Relations
Stephen F. Angel -- Chief Executive Officer and Director
Sanjiv Lamba -- Chief Operatin