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Green hydrogen - statistics & facts

In a bid to reduce the world’s carbon footprint, industry and government leaders are turning their eyes to a previously under-utilized energy carrier – hydrogen. Particularly the kind derived through renewable-fueled electrolysis and commonly referred to as green hydrogen has drawn major interest. As of 2022, Australia has built the largest number of green hydrogen plants worldwide.

What is hydrogen and how may it help decarbonize multiple industries?

Although it is the most abundant chemical element in the universe, hydrogen does not occur freely in nature and has to be produced using other energy sources. The most common source for global hydrogen production is methane via steam-reforming, with renewable electrolysis only accounting for less than one percent. However, the industry sees great potential in exploiting non-dispatchable excess wind and solar power to manufacture green hydrogen. In fact, hydrogen production forecasts by major energy institutions see green hydrogen far outpacing fossil gas-based production by mid-century.

From heating our homes to fueling our cars and storing excess energy, proponents have touted hydrogen as a key player in decarbonizing the economy. In the transportation sector, hydrogen fuel cells power engines by creating electricity, emitting only water vapor. In the heavy industry sectors such as cement and steel production, some companies have started exploring the use of green hydrogen instead of coking coal. Meanwhile, in the energy sector, renewable electricity may be converted into hydrogen and stored for later use. In 2021, the global hydrogen energy storage market value was estimated at nearly 15 billion U.S. dollars.

Hydrogen market landscape

The Americas account for 45 percent of worldwide electrolyzer production – the machines used to manufacture hydrogen using electricity. North and South America have some of the greatest economic potential for producing green hydrogen at below 2 U.S. dollars per kilogram. Green hydrogen production costs currently range between three and 7.5 U.S. dollars per kilogram, with fossil fuel-derived hydrogen still far cheaper. The projected selling price of large-scale green hydrogen projects is expected to vary greatly depending on scale and availability of local energy resources.

Current and future challenges

Some of the major drawbacks addressed by critics circle around costs, transportation, and uncertainty over the performance of a hydrogen economy. For example, when looking at alternative transportation fuel efficiency, hydrogen fuel cells were found to only reach an overall efficiency of 30 percent compared with 77 percent for directly chargeable battery electric vehicles. There have also been some studies on the feasibility of hydrogen-heated homes suggesting it could increase accident and ignition probabilities. Additionally, retrofitting existing gas pipelines for hydrogen use would more quickly corrode steel-based pipelines and very likely lead to leakages due to the smaller size of the hydrogen molecule.

The early years of wind and solar energy use may be a lesson for how the green hydrogen market develops in the future. As with wind and solar, much hinges on government support and incentives for alternative energy exploration to make renewable-sourced hydrogen a cost-competitive substitute. A 2021 survey found that many of the challenges with hydrogen technology center around lacking infrastructure and complex distribution. Hydrogen is transportable in the form of ammonia or once liquefied and landed costs may vary depending on the shipping route and form in which they are transported, with liquefied hydrogen potentially a cheaper alternative to ammonia.

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