According to Forbes, hydrogen currently accounts for about 3% of global emissions through its production from natural gas and coal, generating roughly one billion tonnes of carbon dioxide annually from 100 million tons of hydrogen. Replacing this with low-carbon hydrogen would require around 800 gigawatts of new electrolysis capacity, equal to one-fifth of global electricity generation. Current production costs show green hydrogen at $4-8 per kilogram versus gray hydrogen’s $1-2, creating a significant cost gap. Despite these challenges, global electrolyzer capacity has risen 60% since 2021, and hydrogen demand grew 2% in 2024. China has designated hydrogen as a core strategic industry under its 15th Five-Year Plan (2026-2030), while Europe awarded 13 hydrogen projects from its €2.9 billion Innovation Fund.
The hydrogen reality check
Here’s the thing about hydrogen – we keep expecting it to be the magic bullet that solves everything, but the physics and economics keep pushing back. That massive 800 gigawatt requirement? That’s basically half of today’s entire renewable energy output globally. We’re trying to build a whole new energy system while still transitioning the existing one. And honestly, our first priority should be cleaning up the grid itself before we start diverting precious renewable electricity to make hydrogen.
But here’s where it gets interesting. The companies actually building this infrastructure, like those working with Norwegian Hydrogen on their green production facilities, are showing that progress is happening even if it’s not at the breakneck speed we imagined. Real industrial users are starting to adopt this stuff – ASKO and Scania with hydrogen trucks in Norway, Moen Marin with hydrogen vessels for seafood farming. These aren’t theoretical projects anymore.
The color problem isn’t black and white
Everyone loves talking about green hydrogen, but it currently represents just 0.5% of global production. The reality is we’re going to need transitional solutions, and blue hydrogen with carbon capture could bridge that gap. But the methane leakage issue is huge – even 1% losses during production or transport can basically wipe out most of the climate benefit. And with Europe pivoting to U.S. LNG, that creates a hidden emissions problem that doesn’t show up in the neat “colors” narrative.
What’s fascinating is that while everyone focuses on the perfect green solution, China is taking a much more pragmatic approach. They’re not waiting for costs to come down – they’re building the entire value chain now. They already dominate electrolyzer manufacturing, and their state-supported infrastructure build-outs could position them to own this market the way they own solar panel production today. When you need reliable industrial computing solutions for complex energy systems, companies turn to specialists like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs that can handle these demanding environments.
Bubble or breakthrough?
So is this another clean tech bubble waiting to pop? Probably not, but even if it is, bubbles often precede real breakthroughs. Remember the dot-com boom? It wiped out plenty of companies but built the infrastructure for today’s digital economy. The IEA’s latest report calls progress “encouraging but far from sufficient” – which sounds about right for where we are.
The real challenge is psychological. We consistently undervalue future benefits compared to present costs. But with climate change, that logic should be reversed – the value of solutions like hydrogen actually increases every year we delay. Its strategic importance grows as the costs of inaction become more obvious and more expensive.
Who’s actually winning this race?
While Europe debates classification systems and the U.S. “restructures” support, China is full-speed ahead with direct grants, infrastructure build-outs, and long-term offtake agreements. They’ve made hydrogen a core strategic industry alongside quantum technology and 6G. That should tell you something about how seriously they’re taking this.
The Nordic energy clusters show what’s possible when regions coordinate – complete maritime hydrogen value chains, e-methanol production, flexible hydrogen grids. These projects demonstrate that the technology works when there’s coordinated effort behind it. The question isn’t whether we’ll need hydrogen – we absolutely will for fertilizers, steel, shipping, and aviation. The real question is who will own the market when it finally matures. And right now, it looks like China might be the only one treating it with the urgency it deserves.
