What is the hydrogen economy?

The hydrogen economy encompasses the many systems required to ensure the sustainability of hydrogen as a fuel source. Here we discuss the current state of the hydrogen economy and the benefits presented by an established hydrogen infrastructure as well as the challenges that must still be overcome.

Current state of the hydrogen economy & projected trajectory

The idea of a hydrogen economy has been around since the 1970s, yet the high cost and lack of established infrastructure has left it on the backburner – until recently. A global push toward sustainable systems is rekindling interest in the concept of a hydrogen economy. In 2020, Europe took a huge step forward by spending in excess of €45 billion to establish hydrogen production from “greener” sources and to scale hydrogen distribution and fuel cell infrastructure – and it is projected that by 2050, €180-470 billion will be invested into renewable hydrogen.

Benefits of using hydrogen as a fuel source

Hydrogen has a lot to offer as an energy efficient, environmentally friendly alternative fuel source. Whereas hydrocarbon based fuels used to power combustion engines release harmful emissions into the air, hydrogen fuel can be used to power fuel cells – with water as the only byproduct!

Fuel cell equation: 2H2 + O2 -> 2H2O + Energy

Hydrogen can also be used synergistically with other renewable energy sources. Energy generated by solar and wind must be used immediately and relies on weather patterns, but hydrogen can be stored as a liquid or gas until it is needed and can be produced as long as supply permits. This makes the hydrogen economy an ideal bridge between renewable energy sources and our current energy demand.

Challenges faced by the developing hydrogen economy – and solutions

For the time being, the hydrogen economy lacks the economies of scale required for hydrogen and fuel cells to immediately replace fossil fuels and combustion engines – and getting to that point will require several initial investments in technology. As groups like the automotive industry continue R&D into fuel cell technology, more affordable and scalable solutions will become available.

Energy intensive hydrogen production

One hurdle for the hydrogen economy is optimizing the energy intensive electrolysis and water purification processes required to produce green hydrogen. Several industrial scale projects are working on providing the necessary solutions. One such solution is high temperature electrolysis, which can greatly improve electrolysis efficiency due to the added heat energy (although this can also induce electrolyzer lifetime limitations). Additionally, early research in photochemical, photobiological, and biomass methods present promising alternatives for green hydrogen production.

Lack of hydrogen electric vehicles & fueling stations

Hydrogen powered vehicles present numerous benefits over combustion engines and battery-powered vehicles, offering carbon neutrality, greater driving ranges, and reduced fuel times all in one. But the automotive industry is facing a dilemma: there is a lack of hydrogen powered vehicles, partially due to lack of hydrogen fueling stations… and there is a lack of fueling stations, partially due to a lack of hydrogen vehicles. Fixing this dilemma is certainly not cheap, but the benefits are quite intriguing, and several government initiatives are working to accelerate the transition to an established hydrogen economy.

Need for better hydrogen storage and dispensing techniques

Storing and dispensing hydrogen is also a challenge for the hydrogen economy due to the extreme pressures and temperatures required to store pure hydrogen efficiently, but new technologies are being developed to overcome this. One such development is the use of metal oxides for storage – e.g. storing hydrogen as magnesium hydride paste.

Additionally, existing infrastructure for off-shore oil and gas can be repurposed with hydrogen generation and storage infrastructure, using oil rigs to mount electrolysis systems and depleted natural gas caverns and pipelines for hydrogen storage and transport.

The hydrogen economy will likely play a significant role in the decarbonization of our existing systems – and given the large allocation of funding and efforts into this infrastructure, experts hope this will become a reality within the next decade.


Learn more about the hydrogen economy below.

Climate change affecting global weather systems - hurricanes threatening the American east coast

The environmental potential of hydrogen

To avoid the critical 2°C increase of global temperatures, greenhouse gas emissions need to be reduced 85% by 2050. This poses a serious challenge for many energy-intensive industries, including commercial transport, shipping, and heavy industry. Currently battery technology is insufficient to meet energy demands, so an alternative solution is required. Hydrogen fuel offers is a promising carbon-neutral solution. However, there are many hurdles to overcome before sustainable hydrogen production can be achieved.

Challenges to reaching scaled adoption of hydrogen

To bring about a fundamental change in what powers certain industries, significant infrastructure and technology changes are required. While hydrogen technology is ever-advancing, many challenges in the generation, distribution, and use of hydrogen remain. In some cases, established infrastructures can be used to implement hydrogen systems. However, significant cross-sector shifts are required to unlock the full potential of hydrogen and decarbonize whole industries. Several technological and scaling challenges must first be addressed to make the transition economical for industries.

Hydrogen energy storage with renewable energy sources
A hydrogen-powered vehicle fuels up

Fuel cell electric vehicles

A hot discussion topic in the renewables space is on hydrogen vs. battery-powered vehicles. Battery technology is well established and can more easily fit into our current infrastructure, however batteries are heavy and cannot be efficiently used for transport. Hydrogen technology has higher energy density and is therefore not so heavy, but methods of generation, storage and filling station infrastructure are still in development.

Electrolysis technology - green hydrogen production

The method of hydrogen production is the key factor to the environmental and commercial viability of hydrogen. Electrolysis presents a viable method of hydrogen production, however process efficiency and scalability must be improved. For now, producing green hydrogen is much more expensive than using fossil fuels to create hydrogen. The cost gap is closing, but this remains a major hurdle that must be overcome before widespread adoption of hydrogen can be achieved.

DI water for electrolysis
Photovoltaic panels for solar hydrogen power

Solar powered hydrogen production

There are two primary ways to generate hydrogen from solar energy. Photochemical hydrogen production uses solar energy directly to split water providing a high-efficiency means of hydrogen production.

While solar powered electrolysis uses solar cells to generate electricity and power electrolysers. The use of already established technologies allows immediate implementation and can provide certain geographies with large amounts of green hydrogen.

Waste to hydrogen

Converting waste into a usable energy source is not a novel concept, but now several companies are exploring the use of plasma technology to break down waste to its base elements in order to produce hydrogen.

Plasma laser as an example of a specialty fiber optic cable
The Ruhr Region in Germany

Hydrogen valleys

For countries with a pre-existing strong renewable energy infrastructure, moving to include hydrogen technology has been a clear next step to strengthen and diversify their renewable energy systems. Each of these regions has its own unique strengths and applications of hydrogen technology.

Hydrogen in the maritime industry

The shipping industry contributes 3% of global greenhouse gas emissions. Given the long distances covered and the large energy requirements of commercial ships, converting the industry to renewable power is particularly difficult. Energy dense hydrogen presents an ideal solution. While some storage and filling station challenges must first be overcome, there are much fewer individual vehicles and transport hubs in maritime than in land-based transport. This presents an interesting opportunity for the rapid adoption of hydrogen technologies.

Rotterdam port
Military hydrogen hybrid drone

Hydrogen powered drones

Battery powered drones are greatly limited by the power and weight of battery technology to sustain long distance and heavy cargo transport. Hydrogen provides a promising alternative to battery power for UAV’s, given the greater energy density, quick refuel times, and better lifetime durability.

Alicat in the hydrogen industry

Alicat passionately supports scientific and engineering development of cutting edge technologies. For several years now, many hydrogen fuel cell regulation and testing applications have used our mass flow and pressure solutions with the goal of advancing various aspects of the hydrogen economy.

Using Alicat controllers for fuel cell system testing & optimization
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