Hydrogen: where it makes sense and where it does not

Hydrogen is an energy carrier, not an energy source. Understanding where it fits requires following the efficiency losses at each conversion.

How it is made

Steam methane reforming produces the overwhelming majority of hydrogen used today, from natural gas, releasing carbon dioxide. This is the incumbent and is not low carbon.

With carbon capture attached it is sometimes called blue hydrogen. Capture rates in practice are below the theoretical maximum, and upstream methane leakage affects the overall footprint materially.

Electrolysis splits water using electricity. Powered by low-carbon electricity this produces genuinely low-carbon hydrogen, usually called green.

Electrolyser efficiency is typically in the region of sixty to seventy-five percent on a higher heating value basis, which is the first loss in the chain.

The round-trip problem

The arithmetic that determines where hydrogen loses to alternatives.

Take electricity, make hydrogen, store it, and convert it back to electricity in a fuel cell or turbine.

Multiply the electrolysis efficiency by the compression or liquefaction energy by the reconversion efficiency, and the round trip lands somewhere in the region of thirty to forty percent.

A lithium-ion battery round trip is around ninety percent.

Which means that for any application where a battery can do the job, hydrogen wastes roughly two-thirds of the input energy.

That is the single most important fact in the debate, and it explains most of the disagreement.

Where it genuinely fits

Industrial feedstock. The strongest case by far.

Ammonia production for fertiliser already consumes enormous quantities of hydrogen, currently made from natural gas. Replacing that with electrolytic hydrogen decarbonises a large and unavoidable emissions source with no change to the downstream process.

Refineries and methanol production are similar cases.

This is not a new use of hydrogen. It is cleaning up an existing one, and it is where the near-term abatement is.

Steel. Direct reduction of iron ore using hydrogen instead of coke eliminates the process emissions that make primary steelmaking so hard to decarbonise.

Demonstration plants exist and the technology works. Cost is the barrier.

High-temperature industrial heat that resists electrification.

Long-duration and seasonal storage. Where the alternative is having no storage at all, a poor round-trip efficiency matters less than the ability to store for months at low marginal cost per unit of energy.

Shipping and aviation, mainly as a feedstock for ammonia or synthetic fuels rather than as hydrogen itself, because storing hydrogen aboard is difficult.

Where it fits poorly

Passenger cars. Battery vehicles are far more efficient, the charging infrastructure exists and is growing, and hydrogen refuelling networks have not materialised at scale.

The efficiency gap means a hydrogen car requires roughly three times the electricity per kilometre of a battery car. That is difficult to argue away.

Domestic heating. Heat pumps deliver several units of heat per unit of electricity; hydrogen boilers deliver less than one unit of heat per unit of electricity once electrolysis losses are counted.

Independent reviews of hydrogen heating trials have consistently reached this conclusion.

The interest from gas network operators is understandable, since it preserves an asset. The energy arithmetic does not support it.

General grid balancing on daily cycles, where batteries win on efficiency and cost.

The practical obstacles

Storage and transport. Hydrogen has very low volumetric energy density. It must be compressed to high pressure, liquefied at cryogenic temperature, or converted to a carrier such as ammonia — each costing energy.

Embrittlement. Hydrogen diffuses into metals and degrades them, which constrains what existing pipelines can carry and at what blend fraction.

Leakage. Hydrogen is a small molecule and leaks readily. It is not a direct greenhouse gas and it does extend the atmospheric lifetime of methane, so leakage carries a warming penalty that is being quantified.

Cost. Electrolytic hydrogen remains substantially more expensive than the fossil-derived incumbent in most places, and the gap depends on electricity price and electrolyser utilisation.

High utilisation requires cheap firm electricity, which conflicts with the idea of using surplus renewable output — a tension at the centre of most project economics.