Hydrogen, the most abundant element in the universe, is emerging as a critical component of the global clean energy transition. When produced using renewable electricity, so-called green hydrogen, it emits zero carbon dioxide and can be used to decarbonise sectors that are difficult to electrify directly, including heavy industry, long-haul transportation, shipping, aviation, and seasonal energy storage. The question is no longer whether hydrogen will play a role in the energy future, but how large that role will be.
The Hydrogen Colour Spectrum
Hydrogen is classified by its production method. Grey hydrogen, which accounts for roughly 95 percent of current production, is made from natural gas through steam methane reforming, releasing significant CO2. Blue hydrogen uses the same process but captures and stores the carbon emissions. Green hydrogen is produced by splitting water into hydrogen and oxygen using electrolysis powered by renewable electricity, the only truly zero-emission production pathway.
Other variants include pink hydrogen (nuclear-powered electrolysis), turquoise hydrogen (methane pyrolysis producing solid carbon rather than CO2), and white hydrogen (naturally occurring geological hydrogen, which is attracting growing exploration interest).
Applications and Potential
Green hydrogen’s greatest value lies in sectors where direct electrification is impractical. Steel production currently relies on coal-based blast furnaces that generate roughly 7 percent of global CO2 emissions. Green hydrogen can replace coal as the reducing agent, producing steel with water as the only byproduct. Swedish company SSAB delivered the world’s first fossil-free steel in 2021, and several major steelmakers are building hydrogen-based plants.
In transportation, hydrogen fuel cells power vehicles by converting hydrogen into electricity, emitting only water. While battery electric vehicles dominate the passenger car market, hydrogen offers advantages for heavy trucks, buses, trains, and potentially ships and aircraft where battery weight and charging time are limiting factors. Canada’s hydrogen strategy identifies transportation as a key growth sector.
Hydrogen can also serve as long-duration energy storage, addressing the intermittency of wind and solar power. Excess renewable electricity can produce hydrogen during periods of high generation, which can then be stored and converted back to electricity during demand peaks or extended calm periods.
Challenges and Economics
The primary barrier to green hydrogen adoption is cost. Green hydrogen currently costs roughly three to six times more than grey hydrogen, though prices are falling rapidly as electrolyser manufacturing scales up and renewable electricity costs continue to decline. Industry projections suggest cost competitiveness with grey hydrogen by the early 2030s in regions with excellent renewable resources.
Infrastructure represents another challenge. Transporting and storing hydrogen requires either high-pressure compression, liquefaction at minus 253 degrees Celsius, or conversion to carrier molecules like ammonia. Existing natural gas pipelines can transport hydrogen blends, and dedicated hydrogen pipeline networks are being planned in Europe and North America.
Canada is well positioned in the hydrogen economy, with abundant renewable energy resources, existing hydrogen production expertise, and a national hydrogen strategy targeting 30 percent of delivered energy from hydrogen by 2050. As the economics improve and infrastructure develops, hydrogen is poised to become an essential pillar of the global clean energy system.
