Natural gas based hydrogen production with carbon capture and storage is referred to as blue hydrogen. If substantial amounts of CO2 from natural gas reforming are captured and permanently stored, such hydrogen could be a low-carbon energy carrier. However, recent research raises questions about the effective climate impacts of blue hydrogen from a life cycle perspective. Our analysis sheds light on the relevant issues and provides a balanced perspective on the impacts on climate change associated with blue hydrogen. We show that such impacts may indeed vary over large ranges and depend on only a few key parameters: the methane emission rate of the natural gas supply chain, the CO2 removal rate at the hydrogen production plant, and the global warming metric applied. State-of-the-art reforming with high CO2 capture rates combined with natural gas supply featuring low methane emissions does indeed allow for substantial reduction of greenhouse gas emissions compared to both conventional natural gas reforming and direct combustion of natural gas. Under such conditions, blue hydrogen is compatible with low-carbon economies and features climate change impacts in line with green hydrogen from electrolysis supplied with renewable electricity. However, neither current blue nor green hydrogen production pathways render fully “net-zero” hydrogen without additional carbon dioxide removal.