So where are we with Hydrogen?

It has been called the Swiss Army Knife of clean energy and climate solutions. Hydrogen is, indeed, one mighty little molecule. It wields the potential to revolutionize heavy industries, store renewable energy and reduce emissions in sectors that have proven difficult to decarbonize. But what is the value of potential without measures taken to unleash it? 

Fear not, the United States government is well aware of hydrogen’s promising aptitude for advancing our national energy transition. It’s the reason Congress has invested heavily in hydrogen hubs with hopes of seeding as many innovative solutions as possible. 

There’s just one catch. 

As Canary Media reports, hydrogen is an ace for some purposes but less practical for others. For example, clean hydrogen could very feasibly help decarbonize the production of ammonia, a chemical commonly used in agriculture, manufacturing and large-scale refrigeration. Clean hydrogen is also well-suited for industries like long-haul shipping and steelmaking. 

Meanwhile, when it comes to everyday energy production, investing in expensive hydrogen solutions makes far less sense — especially as wind, solar and battery technology continually become cheaper and more efficient. 

So far, the federal government has taken a fairly unbiased approach to seeding hydrogen hubs. The goal of Congress has been to fund as many widespread solutions as possible. I won’t fault them for this. Often we must throw a variety of solutions at the wall to find out what sticks — and that’s exactly what many private corporations, often backed by government incentives, have been doing. 

The key now is to follow through by observing what sticks. 

Private companies across America (and around the world) are doing just that. In the past several years, global hydrogen investments have ramped up by billions, but despite this, the cost of transitioning to renewable hydrogen remains higher than investors were hoping. 

Just this year, multiple large-scale hydrogen projects have been scrapped, including the Prairie Horizon project, a $2 billion joint venture in Dickinson, North Dakota. The venture was originally planned by private corporations Marathon Petroleum and TC Energy to produce low-carbon ammonia-based fertilizer. Prairie Horizon was meant to serve as a key component of the Heartland Hydrogen Hub, spearheaded by North Dakota’s Environmental Energy Research Center (EERC). The “hub” is one of multiple throughout the United States that have emerged in response to $8 billion in funding made possible by the Bipartisan Infrastructure Law.

We can learn a great deal from watching these events play out in the capital markets. Right now, basic economics is forming a clear message about which hydrogen solutions hold water and which ones will never pencil. 

As you can see, the real question isn’t just about building out hydrogen infrastructure in America. It’s about understanding where hydrogen should be used versus where it simply can’t compete. 

The current presidential administration has set a goal to produce 50 million metric tons of clean hydrogen annually by 2050. The chart below was produced by Dan Esposito as part of a 66-page study entitled “Hydrogen Policy’s Narrow Path: Delusions and Solutions.”

Esposito’s visual representation of hydrogen demand demonstrates that even meeting the government’s lofty goal would only fund roughly half of all clean hydrogen pursuits proven to be worthwhile. 

To be clear, funding half of all worthwhile clean hydrogen uses would be a decisive victory for the United States. 

This data further underscores the point that it’s time to get strategic about policy and funding to advance clean hydrogen. We know private corporations are already shaping the future. That future is flowing toward sectors where hydrogen makes financial and environmental sense. If we ignore these signals, we risk propping up an industry that won’t stand on its own without permanent subsidies.

So what’s next in the hydrogen conversation? 

While hydrogen pursuits have lost some steam, the “hydrogen bubble,” so to speak, hasn’t popped yet. 

EERC Vice President for Strategic Partnerships John Harju maintains that, while the market for products like clean-hydrogen fuels and fertilizers may not be developing as quickly as some had hoped, there is promise on the clean hydrogen horizon. Ammonia production has, after all, emerged as a “good use” of clean hydrogen production. 

“Good projects never die,” he told the North Dakota Monitor, “you just have to find the right time for them to happen.” 

The solution is to keep pushing for innovation in hydrogen where it counts while remaining clear-eyed about hydrogen’s limitations. 

Hydrogen will be one essential component of our clean energy transition. In fact, the Department of Energy estimates that hydrogen can help us reduce carbon emissions by up to 25%. That said, this role is only possible if we play it smart and avoid wasting taxpayer funding on short-sighted solutions.