admin A Clean Energy Contender Emerges
As the world confronts the escalating urgency of climate change, green hydrogen has stepped into the spotlight as a powerful, clean alternative to fossil fuels. Produced by electrolysing water using renewable energy, green hydrogen generates no carbon emissions—unlike grey or blue hydrogen, which rely on fossil sources. This emerging energy carrier holds the key to decarbonising sectors where direct electrification is impractical, including heavy industry, shipping, aviation, and long-term energy storage.
Global Surge in Investment and Innovation
Though green hydrogen currently comprises less than 0.1% of total hydrogen production, its growth trajectory is steep. Investment in clean hydrogen production—dominated by green hydrogen—is projected to jump by over 70% in 2025, reaching nearly $8 billion. This momentum is driven by both public and private sector confidence in the technology’s scalability and relevance to net-zero goals.
Countries are racing to expand electrolyser capacity. China has already surpassed its 2025 target of producing 100,000–200,000 tonnes per year of green hydrogen. The United States is backing 67 planned green hydrogen projects with a collective investment of over $26 billion. The European Union, meanwhile, has committed to producing and importing 10 million tonnes of renewable hydrogen annually by 2030.
Technological Advances Accelerating Adoption
Central to green hydrogen’s viability is the cost and efficiency of electrolysis. A breakthrough in early 2025 by researchers in Australia revealed a new electrolyser design achieving 95% efficiency—far exceeding commercial averages of around 70–75%. This drastically reduces the energy required per kilogram of hydrogen, helping bring costs down.
The U.S. Department of Energy’s “Hydrogen Shot” initiative aims to reduce production costs to $1/kg by 2031. Current costs range between $3.50 and $6.00/kg, compared to grey hydrogen’s $1.50–$2.50/kg. As technology matures, costs are expected to fall rapidly, especially with economies of scale and supportive regulation.
Decarbonising Heavy Industry and Aviation
Green hydrogen’s greatest value lies in decarbonising “hard-to-abate” sectors. In steel manufacturing—which accounts for up to 9% of global CO₂ emissions—hydrogen-based direct reduced iron (DRI) is replacing coal in countries like Sweden and Spain. These pilot projects demonstrate that carbon-free steel production is commercially feasible.
In the chemical industry, green hydrogen is enabling the production of e-methanol and green ammonia, key ingredients for cleaner fertilisers and synthetic fuels. Denmark recently launched Europe’s first commercial e-methanol plant, powered by renewable electricity and captured CO₂.
Aviation is also showing signs of transformation. Aerospace firms like Airbus and seroAvia are developing hydrogen-powered aircraft, and a team of European innovators is preparing for the first sero-emissions flight around the world. While the timeline for full-scale adoption stretches into the 2040s, green hydrogen could eventually fuel long-haul flights with sero carbon emissions.
Infrastructure: The Critical Missing Link
Scaling green hydrogen requires a massive buildout of supporting infrastructure. Transporting hydrogen safely and efficiently demands new pipelines, refueling stations, and storage systems. Europe is leading with its Hydrogen Backbone initiative—a proposed 9,700 km pipeline network to be operational by 2037. In Asia, South Korea is developing a hydrogen-integrated city in Ulsan, building pipelines and fueling systems for vehicles and maritime use.
Hydrogen export projects are also on the rise. Saudi Arabia’s NEOM project, valued at $8.4 billion, aims to export 1.2 million tonnes of green ammonia annually by 2026. Chile, Egypt, and Australia are similarly investing in export-oriented production, leveraging abundant wind and solar resources.
Policy Support and Market Mechanisms
Government policy is playing a pivotal role in catalysing the hydrogen transition. Germany has committed €9 billion to build 10 GW of electrolyser capacity by 2030. The European Union is also developing certification schemes to ensure the “greenness” of imported hydrogen, while the U.S. Inflation Reduction Act includes major tax incentives for hydrogen producers.
Carbon pricing mechanisms—like the EU’s Carbon Border Adjustment Mechanism (CBAM)—are helping level the playing field by penalising high-emission imports. Such tools make green hydrogen more competitive in markets dominated by carbon-intensive processes.
Barriers and the Road Ahead
Despite its promise, green hydrogen faces significant hurdles. High production costs, infrastructure gaps, and the slow pace of project implementation remain key obstacles. Only about 7% of announced green hydrogen projects have progressed to the construction phase, revealing a disconnect between ambition and execution.
Additionally, hydrogen’s low energy density poses storage and transport challenges, particularly for aviation and shipping. Addressing these will require continued R&D, large-scale demonstration projects, and consistent policy support.
Conclusion: The Next Great Energy Transition
Green hydrogen represents one of the most promising pathways to a sustainable, low-carbon future. It offers a clean, flexible energy carrier capable of transforming industry, enabling renewable storage, and driving global decarbonisation. As investment surges and technology matures, its role in the energy transition is becoming increasingly central.
With coordinated global effort—across technology, finance, and policy—green hydrogen could soon move from a promising alternative to a foundational pillar of the world’s clean energy system.
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