What Is Green Hydrogen?

Green hydrogen is hydrogen gas produced through electrolysis, a process that uses electricity to split water molecules into hydrogen and oxygen. When the electricity comes from renewable sources like wind or solar, the resulting hydrogen is carbon-free from production to end use. This distinguishes green hydrogen from gray hydrogen, which is produced from natural gas through steam methane reforming and releases significant CO2 emissions.

Hydrogen is not an energy source but an energy carrier. It stores energy in chemical form that can be transported, stored for long periods, and converted back to electricity or heat when needed. This flexibility makes hydrogen attractive for applications where direct electrification is difficult or impractical.

How Electrolysis Works

An electrolyzer passes electric current through water, breaking H2O into hydrogen gas at the cathode and oxygen gas at the anode. Three main electrolyzer technologies are in commercial use or advanced development. Alkaline electrolyzers use a liquid alkaline solution as the electrolyte and are the most mature and lowest-cost technology. Proton exchange membrane electrolyzers use a solid polymer membrane and can ramp up and down quickly, making them well-suited to pair with variable renewable generation. Solid oxide electrolyzers operate at high temperatures and achieve the highest efficiency but are still in early commercial deployment.

The efficiency of electrolysis ranges from about 60% to 80%, meaning that for every 100 kilowatt-hours of electricity input, the electrolyzer produces hydrogen containing 60 to 80 kilowatt-hours of energy. The remaining energy is lost as heat.

Why Green Hydrogen Matters for Decarbonization

Certain sectors of the economy are extremely difficult to electrify directly. Steel production currently relies on coal as both a fuel and a chemical reducing agent. Cement manufacturing produces process emissions from the calcination of limestone that cannot be eliminated by switching to renewable electricity. Long-haul shipping and aviation require energy-dense fuels that batteries cannot practically provide.

Green hydrogen offers a pathway to decarbonize these sectors. In steelmaking, hydrogen can replace coal as the reducing agent in direct reduced iron processes. In chemicals, green hydrogen can replace gray hydrogen as a feedstock for ammonia and methanol production. In transport, hydrogen fuel cells can power heavy trucks, ships, and potentially aircraft where battery weight and range are prohibitive.

Cost and the Path to Competitiveness

The primary barrier to green hydrogen adoption is cost. Green hydrogen currently costs $4 to $7 per kilogram to produce, compared to $1 to $2 per kilogram for gray hydrogen from natural gas. The cost of green hydrogen is dominated by two factors: the cost of renewable electricity, which accounts for 60% to 70% of production cost, and the capital cost of the electrolyzer.

Both factors are declining. Renewable electricity costs have fallen dramatically and continue to drop. Electrolyzer costs are expected to decline by 40% to 60% by 2030 as manufacturing scales up. The US Inflation Reduction Act provides a production tax credit of up to $3 per kilogram for clean hydrogen, which could make green hydrogen cost-competitive with gray hydrogen in favorable locations within this decade.

Hydrogen Hubs and Infrastructure

The US Department of Energy has designated seven regional clean hydrogen hubs, allocating $7 billion to develop production, storage, transport, and end-use infrastructure. These hubs span the country, from the Appalachian region to the Pacific Northwest, and target applications ranging from industrial decarbonization to transportation.

Infrastructure remains a significant challenge. Hydrogen is difficult to store and transport because of its low volumetric energy density. It must be compressed to 350 to 700 bar or liquefied at minus 253 degrees Celsius for practical storage. Existing natural gas pipelines can potentially be repurposed to carry hydrogen blends, but pure hydrogen requires new or modified infrastructure due to its tendency to embrittle steel.