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Watch this space: Hydrogen


Hydrogen, also known as the 'missing link' in the transformation of the energy system, has been gaining significant momentum in the past years. It is expected to play a vital role in the fossil-free future by substituting chemical fuels such as oil and gas in industries where electrification cannot. Let us look at what hydrogen is and evaluate if the hype behind it has any merit.

What is hydrogen?

Almost every written piece about hydrogen starts by mentioning that it is the most abundant element in the universe. There is no denying that this sounds cool. Yet, the sentence that usually follows is just as important. Hydrogen is always found as part of another compound, and it needs to be separated. This is because hydrogen is not an energy source but an energy carrier (like electricity), thus it needs to be produced from an energy source. There are diverse processing methods that use different sources to produce hydrogen. This selection determines the colour label that the final product will receive. There is no universal standard for the colour labels but generally, (i) green hydrogen means the hydrogen is produced through electrolysis using electricity and water (electricity from renewable sources); (ii) blue hydrogen is produced through the steam reforming of natural gas and by utilising Carbon Capture and Storage (CCS) technology; (iii) grey hydrogen implies that it is generated from natural gas or coal without using CCS, releasing carbon emissions in the atmosphere. The momentum is building behind green hydrogen as it has the potential to play a significant role in the energy transition and a zero-carbon world.

Why is hydrogen trending now?

There are two main reasons for the recent momentum behind hydrogen. Firstly, it is more viable now than ever before. Large-scale green hydrogen production projects have become more feasible because of the significant decline in solar and wind energy costs. This has been crucial to the hydrogen industry because a part of hydrogen's attraction comes from its ability to offer a solution to an issue with renewable energies, their intermittent nature. Hydrogen increases the flexibility of the energy market by providing the means to store and transport renewable energy. For instance, utilising sector coupling with the solar industry, hydrogen can be produced when there is plenty of sun (hence, excess energy) to be later turned back to electricity and join the grid when there is an imbalance between supply and demand in a grey day. This will also allow countries with higher renewable resource efficiency and larger natural capital to export their renewable energy worldwide by turning it into hydrogen (in gas form with pipelines or in liquid form with ships).

Moreover, developments in electrolyser technology – the process that uses electricity to decouple hydrogen and oxygen from water – have made the process cheaper and more effective; ultimately, making hydrogen and its variants such as ammonia and methanol less costly to produce, opening possibilities for use in various industries. In addition, an increase in the number of green hydrogen projects will further decrease the costs due to the economies of scale, as a result of splitting costs more efficiently with higher production.

The second reason behind the recent trend is the shift in priorities. The realisation of the inevitability of climate change and its detrimental impact on human life - for the present and future generations - have been shifting the priorities of politicians and business people alike. The ESG and fossil-free energy markets have become the name of the game. Governments started investing in and incentivising the energy transition. Giant oil companies such as BP and Shell started calling themselves 'energy companies'. Industries began looking for ways to cut their fossil consumption and replace it with alternatives. Cumulatively, all of this led to pledges being made from governments, investments in renewable energy technologies and infrastructure, and a culture of accountability.

Whilst electrification is a viable strategy for many sectors, industries such as iron, steel, chemical processing, and refineries had to look elsewhere due to the need for a chemical (physical) fuel to use as a feedstock; and heavy transportation industry (busses, trucks, shipping, and aviation) had to look elsewhere to power their vehicles due to the limited distance capacity that electric batteries can offer. For the transportation industry, hydrogen can be used to power fuel cells or special hydrogen combustion engines to cover long distances without emitting any carbon. Hydrogen is often more efficient and cost-effective for these industries to achieve decarbonisation. Airbus CEO stated that hydrogen fueled planes are the ‘ultimate solution’ to overcome the challenge of decarbonising aviation industry.

Another priority for governments is energy security. This ever-important issue reached new heights following the global supply chain crisis during the pandemic and in the aftermath of sanctions imposed on Russia following their invasion of Ukraine. As explained above, hydrogen can play a role in diversifying the energy imports of countries by allowing the long-term storage and transportation of renewable energy with a global hydrogen market. This has the potential to boost the interest in hydrogen projects in countries looking to increase their energy security.


Looking at Germany's announcement to invest more than EUR 8 billion (nearly USD 10 billion) to fund large-scale hydrogen projects and Airbus' announcement of plans to test a hydrogen-powered jet engine, it is safe to assume that we will hear more about hydrogen in the years ahead. Perhaps we will even stop calling it the ‘missing link’.


1. The Future of Hydrogen - Report by IEA for the G20:

2. Hydrogen: A renewable energy perspective - IRENA


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