Hydrogen — the most abundant element in the universe — is emerging as a crucial piece of the clean energy puzzle. When produced from renewable energy sources, so-called green hydrogen offers a zero-emission fuel that can decarbonize sectors that are difficult to electrify directly: heavy industry, long-distance shipping, aviation, and high-temperature industrial processes. But realizing hydrogen’s potential requires overcoming significant technical, economic, and infrastructure challenges.
What Is Green Hydrogen and How Is It Made?
Green hydrogen is produced by electrolysis — using renewable electricity to split water molecules into hydrogen and oxygen. The resulting hydrogen can be stored, transported, and used as a fuel or chemical feedstock with no carbon emissions at the point of use. However, over 95 percent of hydrogen produced today comes from natural gas reforming (gray hydrogen), which releases significant CO2.
The economics of green hydrogen depend critically on the cost of renewable electricity and electrolyzers. Both are declining rapidly — electrolyzer costs have fallen by roughly 60 percent in the past five years, and renewable electricity costs continue to drop as described in our guide to energy technologies. Projections suggest green hydrogen could reach cost parity with gray hydrogen in many regions by 2030.
Where Does Hydrogen Make the Most Sense?
Heavy industry is among the most promising applications. Steel production, which accounts for roughly 7 percent of global CO2 emissions, can use hydrogen to replace coal as the reducing agent. Several European steel makers are already piloting hydrogen-based processes. Ammonia production, essential for fertilizers, currently consumes over 1 percent of global energy — green hydrogen could decarbonize this entirely.
Long-distance transportation is another key application. While batteries work well for cars and short-range trucks, hydrogen fuel cells offer advantages for heavy trucks, ships, and potentially aircraft due to their higher energy density and faster refueling times. Hydrogen can also be converted to synthetic fuels compatible with existing engines and infrastructure.
What Is Canada’s Hydrogen Strategy?
Canada’s Hydrogen Strategy positions the country as a global hydrogen leader, leveraging abundant renewable energy resources, natural gas with carbon capture, and existing infrastructure. British Columbia, Alberta, and Quebec are developing hydrogen hubs. Canadian companies like Ballard Power Systems are global leaders in fuel cell technology, and the country’s experience with chemical engineering supports hydrogen infrastructure development.
