Green Hydrogen and How It Is Produced
Electrolysis, the energy balance, the cost arithmetic, the volume problem and the ammonia and methanol route for ships.
Green hydrogen is hydrogen made by splitting water with electricity from renewable sources, a process that releases no carbon dioxide at the point of production. The International Energy Agency puts world demand at almost 100 million tonnes in 2024, with low-emission routes accounting for under 1% of output.[1] Each kilogram takes about 55 kWh of electricity and at least 9 kilograms of pure water. Its cost comes down to the price of power and the hours the electrolyser runs each year. For ships, the difficulty is storage, which is why most of the shipping discussion concerns ammonia and methanol made from it.
Production Routes and Colour Labels
Hydrogen itself is colourless. Green, grey and blue are market labels for the production route and have no legal meaning. Regulators look at measured emissions per kilogram. Most output today comes from natural gas and coal.
| Label | Route | CO₂ |
|---|---|---|
| Grey | Steam reforming of natural gas | Vented |
| Black, brown | Coal gasification | Vented, highest rate |
| Blue | Gas or coal with carbon capture | Mostly captured |
| Green | Water electrolysis on renewable power | None in production |
Grey hydrogen's emissions are built into the chemistry. The overall reaction for steam methane reforming is CH₄ + 2H₂O → CO₂ + 4H₂. By molar mass, 44 grams of CO₂ accompany 8 grams of hydrogen, so each kilogram of hydrogen carries at least 5.5 kilograms of CO₂. Gas burned to drive the reaction and methane lost upstream push the real figure higher. Those same two items, capture rate and methane leakage, decide how clean blue hydrogen really is. The capture side is explained in Carbon Capture and Storage.
Demand and End Uses
Hydrogen today is mainly a chemical feedstock, used by refineries and by ammonia and methanol producers. Demand grew 2% in 2024 and low-emission output 10%, from a very small base.[1] In these sectors green hydrogen can replace grey with no change to the downstream plant, and direct reduction of iron ore is a developing use.
Electrolysis and the Energy Balance
Electrolysis splits water into hydrogen and oxygen: 2H₂O → 2H₂ + O₂. Since 18 grams of water yield 2 grams of hydrogen, the theoretical requirement is 9 kilograms of water per kilogram of hydrogen. Purification and cooling raise actual consumption.[2] Meeting today's hydrogen demand entirely by electrolysis would take 900 million tonnes of pure water a year for the reaction alone.
Two heating values are in use. Hydrogen's lower heating value is about 33.3 kWh per kilogram and its higher heating value 39.4 kWh.[3] A system drawing 55 kWh therefore runs at roughly 61% efficiency on the lower value and 72% on the higher. The balance leaves as heat.
| Technology | Principle | System use (kWh/kg H₂) | Status |
|---|---|---|---|
| Alkaline | Liquid alkaline electrolyte | About 54.6 | Most common and mature |
| PEM | Solid proton exchange membrane | About 55.1 | Follows variable power quickly, uses precious metals |
| Solid oxide (SOEC) | Steam electrolysis at high temperature | About 40, plus heat | Few installations |
Source: BNEF 2026 data as cited by a manufacturer, and an industry article for SOEC.[2] Values are for Western systems and vary by maker.
These figures also show the scale problem. At 55 kWh/kg, 100 million tonnes of hydrogen would need 5,500 TWh of electricity. Ember's data imply world generation of about 31,700 TWh in 2025, so the requirement equals some 17% of everything the world generates.[4] Installed electrolyser capacity, by comparison, reached about 2 GW in 2024, with over 1 GW more added by July 2025. China holds 65% of installed or committed capacity.[1]
Cost Structure
Electricity is the largest cost. The sum is simple: on a system using 55 kWh/kg, power at $50 per MWh comes to $2.75 per kilogram and power at $30 per MWh to $1.65. That covers electricity alone, and capital and operating costs come on top.
Utilisation is the second driver. A 1 MW electrolyser running 8,000 hours a year makes about 145 tonnes of hydrogen. At 2,000 hours it makes about 36 tonnes. The investment is unchanged, so the capital charge per kilogram quadruples. A plant that runs only in the sunniest hours buys cheap power and sells less product, and striking that balance is the core calculation in choosing a site.
The IEA's 2024 review expected around half of announced renewable hydrogen capacity to produce at $5 per kilogram or more.[5] Its 2025 edition says the gap with gas-based output has widened since 2022 on higher interest rates and rising equipment and construction costs. The same report cut expected low-emission output from announced projects in 2030 from 49 million to 37 million tonnes a year.[1]
Storage and Transport
Hydrogen is rich in energy by mass and poor by volume. A kilogram holds 120 MJ, about three times as much as MGO, but the gas is extremely light. It stays liquid only at about minus 253 °C, and even then its density is just some 71 kilograms per cubic metre.[3] Liquefaction consumes roughly 10 to 13 kWh per kilogram, close to a third of the energy being carried.
The table compares the tank volume needed for the same energy. Figures are lower heating value multiplied by liquid density, and they leave out the extra space taken by insulation and tank structure.
| Fuel | LHV (MJ/kg) | Liquid density (kg/m³) | Energy by volume (MJ/L) | Volume against MGO |
|---|---|---|---|---|
| MGO | 42.7 | About 850 | 36.3 | 1 |
| Methanol | 19.9 | About 790 | 15.7 | 2.3 times |
| Ammonia (minus 33 °C) | 18.6 | About 680 | 12.6 | 2.9 times |
| Liquid hydrogen (minus 253 °C) | 120.0 | About 71 | 8.5 | 4.3 times |
Source: FuelEU default heating values, general physical densities, ratio calculated.[3][6]
Materials and safety add further constraints. Hydrogen can embrittle some steels. It ignites in air anywhere between 4% and 75% by volume, its flame is hard to see in daylight, and the small molecule makes sealing difficult. Gas networks can take it only in limited blends.
Hydrogen and Its Derivatives on Ships
Ships running on pure hydrogen remain small and confined to short routes, with Norway's MF Hydra the best-known case. On deep-sea ships the volume problem above is decisive, so hydrogen usually travels inside another molecule: bonded with nitrogen as ammonia, or with carbon as methanol. Types of Marine Fuel compares these options.
Made from renewable hydrogen, these fuels count in EU law as RFNBOs, renewable fuels of non-biological origin. FuelEU Maritime counts their energy twice until the end of 2033. If their share of the fleet's energy stays below 1% in the 2031 reporting period, a 2% sub-target applies from 2034, although the Commission can waive it on evidence of insufficient production or excessive prices.[6][7]
Hydrogen already sits inside the conventional fuel chain. Refineries consume large volumes to remove sulphur, and refining and fertiliser are seen as the first markets for the green product because the demand already exists. The power side is covered in Renewable Energy.
Discovery and Natural Hydrogen
Henry Cavendish identified hydrogen as a distinct substance in 1766, and Lavoisier named it, from the Greek for water-former. On Earth it is almost always bound up in water and hydrocarbons. Natural underground accumulations also exist. One well in Mali produces from such a deposit and exploration continues elsewhere, though the commercial scale of this resource remains unknown.
Frequently asked questions
What is green hydrogen?
Green hydrogen is hydrogen made by splitting water with electricity from renewable sources, a process that releases no carbon dioxide at the point of production.
What is the difference between green and blue hydrogen?
Green hydrogen comes from water using renewable electricity. Blue hydrogen comes from natural gas or coal, with most of the resulting CO₂ captured.
How much electricity does a kilogram of green hydrogen take?
About 55 kWh on today's alkaline and PEM systems. Liquefaction or compression takes additional energy.
Why do ships not burn hydrogen directly?
Liquid hydrogen needs more than four times the tank volume of MGO for the same energy and must be held at minus 253 °C. Ammonia and methanol look more workable on long voyages for that reason.
Sources
- International Energy Agency. Global Hydrogen Review 2025, September 2025, production chapter and press summaries.
- John Cockerill. Alkaline or PEM Electrolyzers, citing BNEF 2026; Hydate. Electrolysis, Efficiency, and the Real Cost of Hydrogen; WIKA. Electrolysis.
- arXiv 2404.15393 for heating values and liquid density; Wikipedia, Liquid Hydrogen, for liquefaction energy (secondary source).
- Ember. Global Electricity Review 2026.
- Argus Media. IEA Raises 2030 Renewable H2 Cost Estimates, 2024.
- European Union. Regulation (EU) 2023/1805 (FuelEU Maritime), European Parliament summary; European Commission, FuelEU Guidance Document, October 2025.
- Skuld. Fuel EU Maritime Regulation.
