New Energy Frontiers
Where Hydrogen Makes Sense
Which uses of green hydrogen are most promising - fertiliser, refining, steel and shipping - and why using it for cars or home heating is often inefficient.
Hydrogen can do many things, but not all efficiently.
Energy losses
Making hydrogen from electricity, storing it and converting it back loses much of the energy. Using electricity directly is usually more efficient where possible.
Best uses
- Fertiliser: replacing grey hydrogen in ammonia.
- Refineries: replacing grey hydrogen.
- Steel: using hydrogen instead of coal to reduce iron ore.
- Shipping: green ammonia or methanol as fuel.
- Long-duration storage in some cases.
Weaker uses
- Cars: battery EVs are far more efficient; hydrogen car sales remain tiny.
- Home heating: heat pumps are more efficient.
The hydrogen ladder
Analyst Michael Liebreich proposed a “hydrogen ladder” ranking uses from most to least sensible, with fertiliser at the top and cars and home heating near the bottom.
Opportunity cost
Green hydrogen is scarce and expensive; using it where alternatives exist wastes it.
A hydrogen car needs electricity to make hydrogen, compress it and convert it back. A battery car uses the same electricity far more efficiently.
It's best for uses without good electric alternatives.
- Converting electricity to hydrogen loses energy.
- Best uses: fertiliser, refining, steel and shipping.
- Cars and home heating are weaker uses.
- Scarce green hydrogen should go where alternatives are lacking.
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