Hydrogen has significant potential across various industries, including steel production, vehicle fuel cells, aviation fuel, and power generation. When produced using low-carbon methods, hydrogen can play a crucial role in reducing greenhouse gas emissions and air pollution. However, its viability as an energy solution in some applications remains a topic of debate. The uses of hydrogen vary in their level of maturity; for instance, hydrogen-fueled vehicles are available in limited markets, while its application in long-range aircraft is not yet fully developed. The high costs associated with hydrogen and the need for substantial infrastructure modifications pose significant obstacles to its wider use. Despite these challenges, ongoing research and development (R&D) efforts, supported by funding for hydrogen “hubs,” aim to accelerate its commercialization.
Hydrogen is a versatile fuel and a valuable component in specific industrial processes. Its usage results in no carbon dioxide emissions, making it a potential tool for decarbonization in various applications. Currently, hydrogen is predominantly used in mature industrial processes, such as ammonia production for fertilizers and sulfur removal in oil refining. Hydrogen can replace coke or natural gas in steel production, which has been successful in pilot programs but not at a commercial scale due to cost and the need for new or retrofitted plants. Hydrogen fuel cells are used in vehicles, with some manufacturers producing hydrogen-powered cars available primarily in California. However, the limited refueling infrastructure and high cost of hydrogen fuel present challenges. In aviation, small, short-range aircraft have conducted successful test flights using hydrogen fuel cells, with commercial operations anticipated in 2025. Larger, longer-range aircraft may use liquid hydrogen, which is more efficient than fuel cells but requires new propulsion systems and changes to the fuel supply chain.
Hydrogen can also generate electricity or provide heat, particularly in industrial heating processes requiring high temperatures, such as steel, glass, and cement production. However, its higher combustion temperature compared to natural gas necessitates new burner designs or retrofits, which are not yet commercially available. Furthermore, burning hydrogen can result in emissions of nitrogen oxides, which are harmful pollutants.
Hydrogen offers significant opportunities for decarbonization, although it is currently mostly produced using fossil fuels due to cost efficiency. Clean hydrogen, produced using renewable energy, is defined by generating no more than two kilograms of carbon dioxide per kilogram of hydrogen. Despite mature production methods, further R&D is essential to improve efficiency and reduce costs. The federal government supports clean hydrogen through various programs, including the Infrastructure Investment and Jobs Act, which authorized up to $8 billion to establish regional clean hydrogen hubs to accelerate commercialization. These hubs aim to create networks of clean hydrogen producers, consumers, and infrastructure in close proximity.
However, several challenges impede the broader adoption of hydrogen. The cost of producing, transporting, and storing hydrogen remains high, with clean hydrogen potentially costing two to four times more than fossil-based hydrogen. DOE projects a 50 percent cost reduction by 2030. Additionally, hydrogen faces competition from other technologies that may be more cost-effective or readily available, along with a limited supply chain for hydrogen.
Key policy questions include the effectiveness of hydrogen hubs in promoting use and commercialization, potential efforts to reduce costs for clean hydrogen, and the trade-offs between using hydrogen fuel cells and electric battery vehicles for decarbonizing transportation.