Transport sector CO2 emissions are on the rise and responsible for nearly 30% of the EU’s total CO2 emissions (European Parliament,2019). An attractive way to reduce the CO2 emissions by transport is by changing the fuel used. Hydrogen is expected to play a key role in a clean, secure and affordable energy future (IEA). However, a clean, widespread use of hydrogen in global energy transitions faces several challenges. Currently, the global hydrogen production is approximately 7.2 EJ per year, 96% of which comes from fossil fuels. To harness the potential of hydrogen on the way to a clean energy future requires the capture of CO2 from hydrogen production from fossil fuels and greater supplies of hydrogen from renewable energy sources. This study focuses on assessing the techno-economic potential of the membrane technology coupled with carbon capture technology, to produce decentralized bio-hydrogen in realizing a low carbon society in The Netherlands. A literature survey was performed to determine the performance of the membrane reactor & cryogenic capture technologies and expected technological advancements. With the information obtained,a basic process of membrane reforming with carbon capture was modeled in Aspen Plus. Different configurations of the basic process were developed. In the first stage, thermodynamic key performance indicators were used to compare the performance of the different configurations developed. Secondly, one promising configuration was chosen and the levelized cost of hydrogen was used to optimize the process parameters like sweep ratio, permeate pressure, feed pressure etc. Finally, the optimum configuration was used to determine its economic and CO2 emissions potential compared to the conventional steam methane reforming process. Exergy analysis for the optimum configuration was also performed.The optimum levelized cost of hydrogen of the decentralized hydrogen production system developed in this work is calculated to be 4.19 €/kg H2. The levelized cost of hydrogen for the equivalent centralized steam methane reforming system is 5.98 €/kg H2. Therefore, the decentralized system developed is more attractive than the centralized system. The higher costs of the centralized system are due to the hydrogen transportation costs. Furthermore, the carbon capture unit costs 0.68  €/kg H2 and an additional dehydration unit at 0.4 €/kg H2 is required to meet the PEM fuel-cell hydrogen specifications. The efficiency and carbon capture rate of the developed configuration is 66.07% and 72.13% respectively,higher than the conventional process. The exergy efficiency of the developed process is 65.1%. The CO2 emissions for the decentralized system across the value chain are calculated to be 1.4 kg CO2/kg H2. Future scenarios with renewable energy in the electricity mix result in negative CO2 emissions, making the system attractive to limit the climate change and also benefit financially from the EU-ETS. The CO2 emissions of the centralized system are 5.45 kg CO2/kg H2 with post-combustion carbon capture and 10.14 kg CO2/kg H2 with state-of-the-art reforming. With a carbon tax to be implemented soon,the costs of this system will rise making the decentralized system even more attractive. However, uncertainties in the development of an integrated hydrogen transport infrastructure, fuel-grade hydrogen demand, technological advancements in membrane reactors etc. may affect the comparative attractiveness of the systems.