The Future of Green Hydrogen: A Tale of Unfulfilled Potential and Misdirected Focus
The world's enthusiasm for green hydrogen as a clean energy solution has been a rollercoaster ride over the past decade. While the technology has made incremental progress, it has largely failed to meet expectations, leaving investors and policymakers hesitant to fully embrace it. The recent war in Iran has breathed new life into the sector, but this optimism faces significant economic headwinds, particularly in the transportation sector.
California's experience with hydrogen cars is a case in point. Despite the state's big bet on hydrogen as a major part of its transportation sector, the dream has been drifting further from reality. Hydrogen costs four times more per mile than gasoline, even with rising gas prices driven by turmoil in the Strait of Hormuz. The number of hydrogen cars registered in California decreased for the first time in 2025, and the number of hydrogen fueling stations has shrunk, with only two-thirds of those even functional.
The problem extends beyond simple economics. The vast majority of industrial hydrogen is gray hydrogen, produced using fossil fuels. Green hydrogen, which is produced using renewable energies, is better for the environment in terms of life cycle emissions, but it uses precious clean energy resources that are often better and more efficiently used in direct applications. This has led to a major green hydrogen ambition and implementation gap that extends far beyond California.
A study published last year in the prestigious scientific journal Nature Energy found that less than a tenth of planned green hydrogen projects were actually carried out in 2023. "Tracking 190 projects over 3 years, we identify a wide 2023 implementation gap with only 7% of global capacity announcements finished on schedule," the scientists reported. This gap highlights the disconnect between the potential of green hydrogen and its actual implementation.
However, despite this global cooldown, green hydrogen is not entirely dead in the water. A 2025 paper published in Nature Reviews shows that hydrogen still holds enormous potential to reduce greenhouse gas emissions in industry, long-duration energy storage, and long-haul transport. However, it's time to accept that green hydrogen has failed as a solution for fuel cell cars and space heating, as electric alternatives have proven to be more efficient and cost-competitive.
The paper states, "Clean hydrogen should be strategically deployed in areas where it seems likely to have greatest potential for cost and sustainability benefits compared with alternatives such as direct electrification with clean power sources. In the short term, renewable electricity could achieve greater emissions abatement if used directly to displace fossil fuels in power generation, heating, or transport, instead of being used for green hydrogen production. In the longer term, hydrogen could instead facilitate renewables uptake by integrating excess generation into power systems."
Refocusing green hydrogen R&D is a matter of some urgency, as volatility in global fossil fuel markets has reignited interest in the sector and opened a precious window for reorienting investment and policy. China, the United States, and the European Union have all reflected a cautious re-embrace of hydrogen in their energy strategies in recent months. While hydrogen is no longer viewed as a silver bullet solution, it could – and should – be a critical part of a more diverse and resilient global energy landscape.
In conclusion, the future of green hydrogen is a tale of unfulfilled potential and misdirected focus. While it has not lived up to the hype as a solution for fuel cell cars and space heating, it still holds promise in other areas. By refocusing R&D and strategically deploying clean hydrogen, we can harness its potential to reduce greenhouse gas emissions and build a more sustainable energy future.
