What is green hydrogen, and when is it actually the right answer?

The mechanism, in one paragraph

Water is two hydrogen atoms bonded to one oxygen atom. Pass a direct current through water between two electrodes and the bond breaks: hydrogen collects at one electrode, oxygen at the other. This is electrolysis, and it has been understood since the early nineteenth century. Nothing about the chemistry is new or difficult. What is new is having enough cheap renewable electricity to make it worth doing at industrial scale.

The colour labels attached to hydrogen describe where the energy came from, not the gas itself. The hydrogen molecule is identical in every case. Grey hydrogen comes from natural gas through a process that releases carbon dioxide. Blue hydrogen is the same process with some of that carbon dioxide captured. Green hydrogen comes from water and renewable electricity, and releases none.

Where it genuinely earns its place

Hydrogen is useful precisely where electricity is awkward, and that is a narrower set of places than the enthusiasm suggests.

As a chemical input. Fertiliser production needs hydrogen as an ingredient, not as a fuel. Refineries need it for processing. These plants are consuming hydrogen today, made from natural gas, and switching the source changes their emissions without changing anything else about how they operate. This is the least glamorous use and the most immediately sensible one.

For very high temperature heat. Some industrial processes need temperatures that electrical heating does not reach economically. Combustion is required, and hydrogen burns without producing carbon dioxide.

As a chemical reducing agent. Steelmaking conventionally uses coal to strip oxygen from iron ore, which releases carbon dioxide as an unavoidable part of the chemistry. Hydrogen can perform the same reduction and produce water vapour instead.

Where it is the wrong answer

This matters more than the list above, because most hydrogen projects that fail were aimed at the wrong use from the start.

Every conversion loses energy. Electricity into hydrogen loses some. Hydrogen back into motion or heat loses more. If a machine can run on electricity directly, routing that electricity through hydrogen first means buying more generation to do the same work. That is not a marginal inefficiency, it is the central economic fact about hydrogen.

So hydrogen is a poor choice where batteries or a direct connection would serve, and proposals that put it there are usually driven by available funding rather than by the engineering.

The five questions that decide a project

In our advisory work these are asked in this order, because a failure at any one of them makes the rest irrelevant.

Who is the offtaker. Not a category of buyer, a named one, with a volume and a contract. Hydrogen is expensive to store and expensive to move, so a plant without a committed consumer nearby is a stranded asset. This question fails more projects than all the others combined, and it is the one most often postponed.

Where is the water. Electrolysis consumes water and requires it purified, so real consumption exceeds the theoretical figure. In a district where groundwater is already under pressure, a project that competes with drinking or agricultural supply should not be built, whatever the economics say.

What does the power cost, and what shape does it arrive in. Electricity dominates the cost. But the profile matters as much as the price, because an electrolyser running intermittently produces less output against the same capital investment. A cheap tariff that is only available for part of the day may be worse than a higher firm one.

Which electrolyser technology. Alkaline and proton exchange membrane systems differ in how well they handle variable input, in water purity requirements, in response speed, footprint and cost. The right choice follows from the power profile rather than from a supplier preference.

How far to the user. Distance between production and consumption changes the economics faster than almost any other variable, because moving hydrogen is genuinely difficult. Projects sited for land availability rather than for proximity to demand tend to discover this late.

What this means in practice

Green hydrogen is a real technology solving a real problem for a specific set of industries that have no simpler route to decarbonising. It is not a general purpose replacement for electricity, and treating it as one produces expensive plants with nobody to sell to.

The useful discipline is to start from the consumer and work backwards. Find an industry that already uses hydrogen or genuinely cannot electrify, confirm it has water and affordable power nearby, and only then discuss technology. Projects built in that order tend to work. Projects built in the reverse order tend to become case studies.

If you are assessing a hydrogen proposal and want an independent view, that is part of what our advisory bench does.

Related questions

What is the difference between green, blue and grey hydrogen?

Grey hydrogen is made from natural gas and releases carbon dioxide into the atmosphere. Blue hydrogen is made the same way but with part of that carbon dioxide captured and stored. Green hydrogen is made by splitting water using renewable electricity, so no carbon dioxide is produced in the process at all.

Why is green hydrogen expensive?

Because electricity is the dominant input cost and the conversion loses energy at every step. Electricity is used to make hydrogen, and hydrogen is then converted back into heat or power, so more energy goes in than comes out. Where equipment can simply run on electricity, that is cheaper and more efficient than routing it through hydrogen.

Does making hydrogen use a lot of water?

Electrolysis consumes water directly, and it needs that water treated to a high purity before use, which means additional water is used and rejected during treatment. In a water stressed district this is often the constraint that decides whether a project is viable.