Key facts
- Less than a tenth of planned green hydrogen projects were completed in 2023.
- Only 7% of global green hydrogen capacity announcements were finished on schedule.
- California has seen a decrease in hydrogen car registrations and a reduction in functional fueling stations.
- Green hydrogen is produced using renewable energies, offering lower lifecycle emissions than gray hydrogen.
- Research indicates green hydrogen is more effective in industry, long-duration storage, and long-haul transport than for cars or heating.
- China, the US, and the EU are incorporating hydrogen into their energy strategies.
Green hydrogen, once hailed as a key solution for decarbonizing hard-to-abate sectors, is facing significant implementation challenges, with only 7% of planned global capacity completed on schedule in 2023. Research indicates a wide gap between ambition and execution, with less than a tenth of projects finished as planned.
California's experience exemplifies these struggles, where hydrogen has failed to become a mainstream transportation fuel due to high costs and limited infrastructure. The state has seen a decline in registered hydrogen vehicles and a shrinking number of functional fueling stations, leading to investor hesitancy. Vehicle manufacturers and fleet owners are reluctant to invest when fuel availability is uncertain.
While most industrial hydrogen is currently 'gray' hydrogen produced from fossil fuels, 'green' hydrogen, made with renewables, faces its own efficiency issues. Using clean energy for direct applications often proves more effective than converting it into hydrogen. This has led to a critical assessment of green hydrogen's role.
However, research suggests that green hydrogen still holds potential for specific applications such as industrial processes, long-duration energy storage, and long-haul transport. Experts advocate for a strategic deployment in areas where it offers the greatest cost and sustainability benefits compared to alternatives like direct electrification. In the short term, renewable electricity might be more impactful when used directly to displace fossil fuels.
Despite a global cooldown, renewed interest in hydrogen, spurred by volatility in fossil fuel markets, presents an opportunity to reorient investment and policy. Major economies like China, the United States, and the European Union are cautiously integrating hydrogen into their energy strategies, viewing it as a component of a more diverse and resilient energy landscape, rather than a singular solution.