Hydrogen is often hailed as one of the most promising solutions for future energy storage. But it is only in recent years that this promise has started to materialize. For decades, the production was considered too hazardous, and the handling too complex, for hydrogen to play a meaningful role in the energy supply. That is changing now: hydrogen is well on its way to becoming a global energy carrier.
Hydrogen is seen as a key enabler of the energy transition—especially when it is green hydrogen, produced via electrolysis using renewable electricity. By 2050, global demand could soar from today’s 76 to as much as 600 million tons per year. In Germany alone, green hydrogen could meet around 20% of total energy demand by then. According to a study by the Fraunhofer Institute, this would translate to between 12 and 19 million tons.
Hydrogen is a versatile energy carrier with a huge potential to decarbonize a wide range of fields.
Industry is currently the largest consumer of hydrogen, particularly in these sectors:
Steel and metals: Green hydrogen is set to replace coal in steelmaking to drastically cut CO₂ emissions. "Green steel" is already playing a central role in transforming the steel industry and is considered a flagship project in the fight against climate change.
Chemicals and pharmaceuticals: These sectors are the biggest users of hydrogen today, consuming roughly 45 million tons annually—about 40% of global demand. By 2050, the chemical industry’s hydrogen needs could grow sevenfold, driven in part by new applications.
Hydrogen is especially useful where batteries fall short—when moving heavy loads or covering long distances.
Heavy-duty transport: Hydrogen is key for decarbonizing long-haul trucking and freight, where battery-electric vehicles face limitations in weight, charging time, and range. Companies like DHL and Daimler Truck are already trialing prototypes.
Shipping and aviation: The shipping industry is moving forward with hybrid engines and methanol-based solutions. In aviation, hydrogen-based fuels and engine modifications are in development.
Hydrogen is gaining importance in power generation, particularly as a storage medium for renewable energy and as fuel for power plants.
Power generation and storage: Hydrogen serves as a chemical battery that can be converted back into electricity via fuel cells—without combustion. These cells can reach efficiencies of over 60%.
Heating: Hydrogen can be used in combined heat and power plants, gas turbines, or fuel cells to produce both electricity and heat. Direct combustion of hydrogen is about 2.75 times more efficient than gasoline and emits only water as a byproduct.
Production issues: Most hydrogen today is still derived from fossil fuels—so-called "grey hydrogen"—which worsens its carbon footprint. Green hydrogen, made via electrolysis using renewable energy, is expensive and requires large amounts of freshwater—a particular issue in water-scarce regions. A promising middle ground is "blue hydrogen," which is also fossil-based but captures and stores CO₂ emissions using carbon capture and storage (CCS) technologies.
Infrastructure and logistics: Existing gas pipelines need retrofitting, as hydrogen behaves differently from natural gas. Its small molecules and high volatility also make storage and transport technically challenging.
Environmental risks: Leaks during production or transit could release hydrogen into the atmosphere, where it acts as an indirect greenhouse gas. Associated gases like methane or hydrogen sulfide could also harm local ecosystems.
Europe has made green hydrogen a top priority through its 2020 EU Hydrogen Strategy and the REPowerEU plan, which was launched in response to the end of Russian gas imports. The continent is taking a regulatory lead, though the timeline for implementation is ambitious.
The United States is backing hydrogen through the Inflation Reduction Act (IRA), the largest climate investment in U.S. history, offering generous subsidies. However, political uncertainty—especially with President Trump’s skeptical stance and Elon Musk’s criticism of fuel cells—could undermine long-term strategy.
China is betting on scale, aiming for up to 100 GW of green hydrogen by 2030 and planning mass production of hydrogen-powered vehicles. Infrastructure development is also in full swing, including a 400 km pipeline in the remote north of the country.
Japan was the first country to adopt a national hydrogen strategy back in 2017, envisioning a “hydrogen-based society.” The focus is on technological leadership in fuel cells and electrolyzers.
South Korea introduced the world’s first Hydrogen Economy Promotion and Hydrogen Safety Management Act in 2020. The country is targeting 5.15 million hydrogen vehicles by 2050, with a strong push toward hydrogen mobility.
