Why Are We Not Talking About Hydrogen?

Hydrogen has long been promoted as one of the most promising tools in the fight against climate change, with supporters arguing that hydrogen could help decarbonise sectors that are difficult to electrify, including steel production, shipping, aviation and heavy goods transport.

Yet despite decades of research, billions in government funding and net-zero commitments from countries around the world, hydrogen remains a niche energy source rather than a mainstream replacement for oil, gas and coal. The question increasingly being asked by policymakers and taxpayers is if hydrogen is so promising, why hasn't it been widely adopted?

The Promise of Hydrogen

Hydrogen's environmental credentials are compelling, where hydrogen is produced by splitting water into hydrogen and oxygen using renewable electricity. Unlike conventional fuels, the process which produces what is known as 'Green', hydrogen can be virtually 'Carbon Free', when powered by wind, solar or other renewable energy sources.

Energy analysts believe hydrogen could play a crucial role in reducing emissions within industries that cannot easily switch to batteries. Such industries include steel manufacturing, chemical production, fertiliser plants, shipping and aviation, which all require dense energy sources or high-temperature processes that are challenging to directly electrify. The '2026 Global Hydrogen Review', from the International Energy Agency or 'IEA', highlights the potential of hydrogen contribute to climate goals, industrial competitiveness and energy security.

The Cost Problem

The biggest obstacle facing hydrogen today is economics with the production of green hydrogen remaining significantly more expensive than producing conventional 'Grey', hydrogen, which is produced from natural gas. Electricity is the largest component of hydrogen production costs and can account for up to 70% of the total expense, with renewable electricity in many regions remaining expensive, not yet being cheap enough to make green hydrogen competitive without substantial subsidies.

The IEA notes that, in many sectors, hydrogen would need extensive policy support or carbon pricing to compete against existing fossil-fuel technologies. Even under optimistic scenarios, substantial cost gaps remain across many industries and regions.

This economic reality has led to delays and cancellations of numerous hydrogen projects worldwide, despite strong political support. Investors remain cautious about committing billions to projects that may struggle to achieve profitability.

The Infrastructure

Unlike petrol, diesel, natural gas and even electricity, hydrogen lacks a mature delivery network.

An economy using hydrogen as an energy source requires pipelines, storage facilities, refuelling stations, transport hubs, ports and specialised industrial equipment. Building this infrastructure would require enormous investment over many years.

Hydrogen is also difficult to transport because it has a very low energy density by volume and often needs to be compressed or liquefied, adding further costs and energy losses.

Recent hydrogen development plans in Europe and Asia continue to cite infrastructure readiness as one of the primary barriers to deployment. Governments have announced ambitious targets, but many projects still lack the necessary supply chains and distribution systems to support large-scale use.

Technology is Improving

The hydrogen industry continues to make technical progress, where researchers are developing more efficient electrolysers, reducing reliance on rare materials and improving production methods. New technologies such as advanced water electrolysis systems are showing promise for reducing costs and improving performance.

However, commercial deployment often moves much more slowly than laboratory breakthroughs. Scaling experimental technologies to national or global levels requires years of testing, certification, financing and construction. The gap between scientific potential and commercial reality remains substantial.

Is Hydrogen the Right Solution for Everything?

One reason hydrogen has struggled to gain universal adoption is that many experts no longer see it as a universal energy solution.

While hydrogen is attractive for heavy industry and transport, batteries are generally more efficient for passenger vehicles and many everyday energy applications. Every stage of hydrogen production, storage, transportation and conversion results in energy losses. In contrast, direct electrification often provides a simpler and more efficient pathway to reducing emissions.

As a result, energy planners increasingly view hydrogen as a specialist energy source rather than a complete replacement for fossil fuels. The strongest business cases appear to be in sectors where few alternatives exist.

Political & Market Uncertainty

Hydrogen projects require long term confidence from investors and unfortunately, many markets remain uncertain.

Questions over future energy prices, carbon taxes, government subsidies, environmental regulations and industrial demand have slowed investment decisions. Recent reports from several countries show revised projections for hydrogen deployment due to rising costs, uncertain demand and financing challenges.

Without guaranteed customers willing to pay a premium for low carbon hydrogen, many developers struggle to secure the funding needed to proceed with major projects.

The Verdict

Hydrogen is not failing because the technology doesn't work, in fact, the science behind hydrogen energy is well established and continues to improve. The real challenge lies in economics, infrastructure and market readiness.

As governments seek to meet increasingly ambitious climate targets, hydrogen is likely to become an important part of the clean energy mix. However, it is unlikely to replace fossil fuels across the entire economy in the near future. Instead, the future of hydrogen may lie in targeted applications where electrification is impractical and where reducing carbon emissions is particularly difficult.

The irony is that hydrogen may ultimately prove essential for achieving zero emissions, yet its success depends not on technological breakthroughs alone, but on whether governments, industry and consumers are willing to absorb the significant costs of building an entirely new energy ecosystem.