Governments and global energy firms are betting on hydrogen as a future alternative for fossil fuels, although its future use and costs remain uncertain. For now, hydrogen is commonly extracted from natural gas (gray hydrogen) and coal (brown hydrogen) and used mostly by the oil refining and heavy industries. These production methods emit high levels of carbon dioxide (CO2) although producers can capture the CO2 emission to prevent it from being released to the atmosphere and produce blue hydrogen.
Another production technique is called electrolysis which uses renewable energy to extract green hydrogen from water. Blue and green hydrogen are attracting investments as it can replace natural gas as heating, transportation, and industrial fuel. However, these production methods require higher costs. The price of brown and gray hydrogen is around $1 per kg, compared to $5 per kg for green hydrogen.
Hydrogen transportation is also costly. According to David Eyton, the head of innovation & engineering at BP, using hydrogen locally is more sensible than transporting it a long distance. The EU, UK, Japan, and South Korea as well as global energy producers such as BP, Shell, Aramco, and Total are planning to invest heavily in hydrogen. However, Eyton added that it will take a long time before scaling up hydrogen business.
