Thinking Out Loud About Hydrogen

The debate over how hydrogen is produced -whether through green, blue, or grey methods- often overshadows a crucial point: at this early stage of hydrogen adoption, the focus should be on creating demand rather than exclusively prioritizing the "cleanest" production methods.

In other words, the real challenge right now is to establish a market for hydrogen in transportation, energy generation, and industrial applications. Without this demand, there will be no incentive to invest in the infrastructure needed for large-scale, sustainable hydrogen production.

Creating Demand: The Key to Breaking the Hydrogen Catch-22

The hydrogen industry is currently trapped in a classic catch-22 situation: without a robust demand, there is no economic justification for scaling up hydrogen production and building the necessary infrastructure.

At the same time, without a reliable and cost-effective Supply Chain, potential consumers are reluctant to adopt hydrogen as an alternative fuel source. This deadlock prevents hydrogen from reaching its full potential as a cornerstone of the future energy landscape.

Why the Method of Hydrogen Production Should Take a Backseat - For Now

While the environmental footprint of hydrogen production is important, the immediate priority should be to unlock its usage across various sectors. Here’s why:

• Kickstarting the "Hydrogen Economy":

The initial goal should be to catalyze demand by introducing hydrogen in areas where it can be competitive, even if hydrogen is not yet produced in its most sustainable form. For example, hydrogen can already make significant contributions in hard-to-abate sectors like heavy transport and industrial processes. Once there is a viable market, this will naturally drive investments in cleaner production technologies.

• Enabling "Economies of Scale":

Early adoption and increased usage will lead to economies of scale, which can lower costs and accelerate the transition to green hydrogen. A larger market would also incentivize innovation in hydrogen production technologies, reducing the carbon footprint over time.

• Building the “Supply Chain Infrastructure”:

To meet growing demand, a dedicated hydrogen supply chain needs to be developed. This includes production facilities, storage solutions, and distribution networks. Focusing on the purity of production at this stage can slow down the much-needed investment in this infrastructure. Instead, the priority should be to establish a flexible supply chain that can transition to greener hydrogen as technology advances and costs decrease.

• Supporting “Policy and Regulation”:

Governments and regulators are more likely to support the hydrogen economy if there is a visible market need. Once hydrogen becomes a critical part of the energy mix, policy frameworks can evolve to push for cleaner production methods. For now, incentives should target the uptake and integration of hydrogen into existing systems.

Conclusion: The Need for a Pragmatic Approach

At this nascent stage, it is less important how hydrogen is produced and more critical to build a market that justifies investment in hydrogen infrastructure. By focusing on creating demand first, we can break the cycle that keeps hydrogen on the fringes of the energy transition. Only by overcoming this initial hurdle can we start planning for the large-scale, sustainable production methods that are essential for the future.

Ultimately, a pragmatic approach -one that prioritizes the establishment of demand and the creation of a resilient supply chain- will pave the way for hydrogen to become a significant player in the global energy landscape. Once the market is mature, the conversation can shift towards optimizing production methods for maximum sustainability.