Green hydrogen
Also known as: renewable hydrogen, electrolytic hydrogen
Green hydrogen is hydrogen gas produced by using renewable electricity to split water into hydrogen and oxygen, a process called electrolysis.
When it's used, it emits only water. Most hydrogen today is 'grey,' made from natural gas with large CO2 emissions. While green hydrogen was once pitched as a fuel for everything from cars to home heating, its cost and energy losses are steering it toward a narrower role: steel, fertilizer, refining, and other uses that are hard to electrify directly.
Green hydrogen, explained at three levels
At home
Think of water as a tightly locked box holding hydrogen and oxygen, with electricity as the key. In a machine called an electrolyzer, an electric current splits water into hydrogen gas and oxygen gas. The hydrogen can later be burned or run through a fuel cell, releasing energy and turning back into water. If the electricity comes from wind, solar, or hydro, the hydrogen is called green.
At work
Green hydrogen is hydrogen made by splitting water with renewable electricity, so its production emits almost no CO2. It matters to industries that use hydrogen as an ingredient, such as fertilizer and refining, or that need very high heat, such as steel. It still costs more than the grey hydrogen made from natural gas, which dominates production today.
At home
Hydrogen is labelled by colour based on how it is made. Grey comes from natural gas through steam methane reforming, which releases CO2. Blue uses the same process but captures much of that CO2. Green comes from electrolysis powered by renewables, and pink from electrolysis powered by nuclear. The gas is identical in every case. The colour only describes the emissions behind it, which is why buyers and regulators care about tracking its origin.
At work
An electrolyzer has two electrodes separated by an electrolyte. Alkaline electrolyzers use a liquid potassium hydroxide solution and are mature and cheap. Proton exchange membrane (PEM) units use a solid polymer and respond quickly to variable wind and solar. Solid oxide units run hot and are more efficient but less proven. Cost depends mostly on electricity price and how many hours the machine runs. Hydrogen is hard to store and ship, so it is often converted to ammonia or used near where it is made.
At home
Every conversion loses energy. Electrolysis keeps roughly 60 to 75% of the electricity's energy, compression or liquefaction costs more, and a fuel cell turning hydrogen back into power loses about half of what remains. The round trip can waste well over half the original electricity. While hydrogen is useful where nothing else works, in my view using clean electricity directly, in batteries or heat pumps, usually beats it.
At work
Whether hydrogen is truly low-carbon depends on accounting rules. Additionality asks whether the electricity came from new clean generation, hourly matching checks that it was produced at the same time, and deliverability checks that it was on the same grid. The EU's rules and the US 45V credit adopted versions of these tests. Projects also need long-term offtake contracts, which have been scarce. Priority uses are ammonia, direct reduced iron steelmaking, and refining, not home heating or passenger cars.
Real-world examples
At home
Fatima saw a news story about a hydrogen bus pilot in her city. Reading further, she learned the buses' hydrogen was mostly 'grey,' made from natural gas, which surprised her since the buses were advertised as zero-emission.
At work
Sophie is a strategy manager at a Canadian fertilizer producer. Her team modelled replacing part of its natural-gas-based hydrogen with green hydrogen from a wind project, finding it only worked with tax credits and a long-term electricity contract.
How it compares
| feature | Green hydrogen | Blue hydrogen | Grey hydrogen |
|---|---|---|---|
| Production method | Electrolysis with renewable power | Natural gas with carbon capture | Natural gas without capture |
| CO2 emissions | Very low | Reduced, depends on capture rate | High |
| Cost today | Highest | Medium | Lowest |
| Share of production | Very small | Small | Most |
The colours describe how hydrogen is made and how much carbon it carries.
For analysts
Hydrogen proposals often skip the efficiency question. I'd always compare a hydrogen project against direct electrification for the same use, because the answer is usually decisive.
History & origin
Electrolysis has been understood since 1800, and hydrogen has long been used in refining and fertilizer production, almost entirely made from fossil fuels. Hydrogen cars gained attention in the 2000s, but battery EVs outpaced them. Interest surged again around 2020: the EU published a hydrogen strategy, and Canada released its Hydrogen Strategy that December. The US Inflation Reduction Act of 2022 created the 45V credit worth up to US$3 per kilogram, and the 2025 One Big Beautiful Bill Act kept it only for projects starting construction by the end of 2027. Many announced projects worldwide were delayed or cancelled as costs rose and buyers proved scarce. In my opinion, green hydrogen's future depends on targeting the uses where nothing else will do.