Clean hydrogen is facing a big reality check

A major barrier for clean hydrogen today is that dirty methods based on fossil fuels are just so much cheaper than cleaner ones.

But China is well on its way to narrowing that gap. Today, it’s roughly three times more expensive to make and install an electrolyzer anywhere else in the world than in China. The country could produce green hydrogen that’s cost-competitive with fossil hydrogen by the end of the decade, according to the IEA report. That could make the fuel an obvious choice for both new and existing uses of hydrogen.

3. Southeast Asia could be a major emerging market for low-emissions hydrogen.

One region that could become a major player in the green hydrogen market is Southeast Asia. The economy is growing fast, and so is energy demand.

There’s an existing market for hydrogen in Southeast Asia already. Today, the region uses about 4 million metric tons of hydrogen annually, largely in the oil refining industry and the chemical business, where it is used to make ammonia and methanol.

International shipping is also concentrated in the region—the port of Singapore supplied about one-sixth of all the fuel used in global shipping in 2024, more than any other single location. Today, that total consists almost exclusively of fossil fuels. But there’s been work to test cleaner fuels, including methanol and ammonia, and interest in shifting to hydrogen in the longer term.

Clean hydrogen could slot into these existing industries and help cut emissions. There are 25 projects under development right now in the region, though additional support for renewables will be crucial to getting significant capacity up and running.

Overall, hydrogen is getting a reality check, revealing problems cutting through the hype we’ve seen in recent years. The next five years will tell whether the fuel can live up to the still-lofty hopes.

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