If you want more information on this opportunity or if you are an inventor, a university tech transfer office, a VC or indeed you just want to be part of our innovation community, we would love to talk with you.

Contact Us

To what extent will the hydrogen economy become a reality?



Hydrogen (H2) has been brought forward as a source of energy repeatedly since the 1970s due to shortages of conventional hydrocarbons (oil and gas), concerns over climate change in the 1990s and the establishment of a dedicated policy action with regards to decarbonising the world economy and dealing with a possible peak oil [1]. It has been thought that due to its clean-burning nature, hydrogen could potentially become an excellent substitute for conventional fossil fuels, specifically in hard-to abate economy sectors [2]. Despite hydrogen being the favoured zero-carbon molecule by many, there is still no consensus with regards to what a hydrogen economy future holds, while arguments are being made regarding the up-scaling of hydrogen production, the related infrastructure development (i.e., storage) and its cost-effective distribution and overall value chain [3]. In this present article, we aim to review the current status of hydrogen economics in the global market, present important advantages that show hydrogen’s potential to be the fuel of the future and address key challenges and technology solution providers for a global hydrogen energy deployment. By combining all of the above we aim to better elucidate the extent to which a hydrogen economy can be realised.


Hydrogen economics; today and in the not-so-distant future

Hydrogen production today is possible via a number of methods (thermochemical, electrolysis, biological and other) that dictate the pricing of hydrogen based on production cost (Table.1). The global demand for hydrogen is currently at 2500 TWh (HHV) which is serviced by an annual global production of approximately 70 MT [4], a 75% increase since 2010, corresponding to an overall market size of USD 146 billion [5]. Around 275 Millions of tonnes of oil equivalent (Mtoe) of energy are required to produce the amount of hydrogen needed to meet the annual global demand. As hydrogen is believed to be an important component for meeting decarbonisation objectives, efforts are collectively being made on all fronts (science, technology, policy) to drive hydrogen prices down in the following years. In addition, declining renewables costs are one of the forces driving hydrogen’s potential upwards [1]. Due to competitive prices, optimisation of methods and increase in demand, future projections
show a market size increase of up to 50% by 2028 [5].

Table 1. Production methods, types and associated hydrogen production prices today and in the 2030 projection (estimate), per Kg of H2

Overall, projections are in agreement with respect to the global hydrogen demand for the next decade – a steady increase in demand is the most possible scenario until 2030. However, from 2030 onwards and until 2050, the data appear inconclusive as individual studies provide estimates by factoring in different scenarios and parameters. For these projections, region, global warming scenarios and the motivation to prevent it (limiting temperature peaks), adaptation to policies, hydrogen uses (transport, heat, buildings etc.) are included, creating both quantitative and qualitative discrepancies between studies [4].


Hydrogen advantages

Although the term advantage is used to stress the positive aspects of using hydrogen as a fuel, it is by no means used conclusively. The claim that hydrogen has the edge over most conventional/renewable sources of energy, calls for a multidisciplinary analysis that includes a number of variables, namely the technology, logistics, storage and distribution, policy making and geopolitical circumstances, to name a few. The below, however, have been important for giving hydrogen a significant boost over the past decade by providing it with the potential to become a leading fuel in the future carbon-zero world.

  • Hydrogen is a versatile molecule, readily available to produce, distribute and store through established pathways and technologies [7].
  • Its high energy density, improves productivity making it an important element for fuel cell and emissions – free applications [2].
  • Hydrogen is an excellent “decarboniser” and can help reduce carbon emissions in many sectors – this includes but is not limited to transport, chemicals and iron-steel [1].
  • Hydrogen has the potential for storing energy from renewables and is on track to becoming the lowest cost option for storing electricity over long periods of time (weeks, months) [8].
  • Hydrogen can be used as a carrier, having a greater capacity to contain energy than natural gas or gasoline [7].


Key challenges

It is however important to point out the key challenges with respect to deploying a hydrogen energy plan that could cover global energy demand in the following years [1,9].

Policy and the pace at which it is applied by governments remains an uncertainty. Governments should willingly create and fine-tune policy frameworks that support hydrogen.

Technology used to create hydrogen does not provide attractive cost-effective applications, therefore there is a need for optimizing research and development.

Infrastructure is not fully supporting a hydrogen delivery network at the moment. Preconditions need to exist in order for a successful hydrogen energy deployment (i.e.

refuelling stations for road transport).

Regulations and standards are not suited for a transition to a hydrogen economy, as they are either unclear or exclude hydrogen.

Supply chain and investing need to be better aligned for hydrogen to be produced and delivered to the end users in a timely and efficient manner.


Companies redefining the generation and distribution of hydrogen

Linde Plc; Headquartered in the UK, the American-German company specializes in hydrogen production as well as other gases including oxygen, acetylene, argon and helium and distribution. Linde develop and optimize the processing of gas as well as separation and liquefaction technologies that lead to maximizing lifecycle efficiency and productivity. Linde incorporate a number of technologies in their portfolio including Power-to-X (P2X) technologies (i.e. conversion technologies for turning electricity into carbon-neutral fuels using wind, sun and other sources including hydro and/or geothermal plants).

Cummins Inc.; a US multinational corporation founded in 1919 that specializes in all aspects of filtration, engines as well as power generation products, including the design, manufacturing and distribution. Cummins Inc have been producing hydrogen on-site via generators, HySTAT™ and HyLYZER™. Their advanced modular electrolysers are designed for indoor and/or outdoor installation and range from 10Nm3/h up to 1000Nm3/h and can be scaled-up to deliver high purity hydrogen.

McPhy; A designer and manufacturer of equipment for the production of hydrogen since 2008, McPhy also provide integration services to clients in addition to a range of hydrogen solutions for on-site production. These include high energy efficiency electrolysers and hydrogen stations (compact and modular) suitable for a number of applications (i.e. cars and busses, trucks and trains, etc.).

Lhyfe; This start-up founded in 2017 in Nantes, France, is a producer and supplier of renewable energy using solar and wind plants as a hydrogen generation source by means of electrolysis. Solutions are applicable across sectors such as transportation, fuel distribution and others.



Hydrogen is gaining significant attention and shows potential for being an excellent fuel in a carbon-free future. Researchers are optimistic for its progression in the global markets and its imminent acceleration on all fronts, at least until 2030. Hydrogen’s great capacity is not free of limitations as those were mentioned in the previous sections despite the advancements in science and technology. These limitations call for collective and multidisciplinary solutions to be found and applied to allow a hydrogen economy to become a reality on a global scale. To what extent this economy becomes a reality though, remains to be seen.

At SAL we work closely with companies on technical and market challenges within the context of a sustainable, circular economy and amongst other deliverables we provide practical green energy options and partners for organizations to achieve their energy transition targets. Please contact us at john@strategicallies.co.uk for an exploratory discussion regarding the challenges you face.



  1. IEA; The future of hydrogen, technology report, 2019
  2. BloombergNEF; Hydrogen economy outlook, 2020
  3. Niall Mac Dowell, Nixon Sunny, Nigel Brandon, Howard Herzog, Anthony Y. Ku, Wilfried Maas, Andrea Ramirez, David M. Reiner, Gaurav N. Sant, Nilay Shah, The hydrogen economy: A pragmatic path forward, Joule, Volume 5, Issue 10, 2021
  4. PWC; Working paper – hydrogen demand & cost dynamics, 2021
  5. The global hydrogen generation market is projected to grow from $150.20 billion in 2021 to $220.37 billion in 2028 at a CAGR of 5.6% in forecast period; https://www.fortunebusinessinsights.com/industry-reports/hydrogen-generationmarket-100745
  6. Energy efficiency & renewable energy charts, https://www.energy.gov/
  7. Mary Helen McCay, Shahin Shafiee, 22 – Hydrogen: An Energy Carrier, Editor(s): Trevor
  8. Letcher, Future Energy (Third Edition), Elsevier, 2020, Pages 475-493,
  9. He, T., Pachfule, P., Wu, H. et al. Hydrogen carriers. Nat Rev Mater 1, 16059 (2016). https://doi.org/10.1038/natrevmats.2016.59
  10.    Andrews, J. and Shabani, B. (2014), The role of hydrogen in a global sustainable energy strategy. WIREs Energy Environ, 3: 474-489. https://doi.org/10.1002/wene.103