The article discusses the utilization of hydrogen-producing membrane reactors (MRs) as a key technology for enabling cost-effective production of blue hydrogen in the transition to a decarbonized economy. By using MRs in processes like fuel reforming or water-gas shift reactions, it becomes feasible to produce blue hydrogen from diverse feedstocks such as biomass, coal, or natural gas. The enhanced feed utilization of MRs results in improved efficiency by producing more hydrogen per unit of feed compared to traditional methods of hydrogen generation. Moreover, MRs have the added benefit of simultaneously separating hydrogen and concentrating CO2, which enhances overall process efficiency and supports pre-combustion carbon capture. The study presents a technoeconomic optimization model for a water-gas shift membrane reactor integrated within a gasification process with carbon capture to produce blue hydrogen. The analysis shows that utilizing water-gas shift membrane reactors can reduce the levelized cost of hydrogen with carbon capture by around 10% compared to conventional reactors and pressure swing adsorption methods. Sensitivity analysis further reveals the significance of operating conditions like temperature, pressure, and space velocity on performance metrics such as CO conversion and hydrogen recovery, offering insights into how to drive down the cost of hydrogen production to below $3 per kg. The findings from this research provide a valuable roadmap for implementing membrane reactors in blue hydrogen production and advocate for continued exploration into optimizing their integration for sustainable hydrogen generation.