In the energy transition, there is one particularly tough nut to crack: sectors like steel, chemicals, long-haul heavy-duty trucks, and shipping—areas that are difficult to electrify directly. Many are pinning their hopes on hydrogen. But first, we need to distinguish between the different types of hydrogen.

I. Gray Hydrogen: The Current Mainstay, Yet Burdened by Carbon

Currently, more than 90 percent of the world’s hydrogen comes from natural gas reforming or coal-based hydrogen production—a process known as “gray hydrogen.” It is inexpensive and well-established, but each kilogram of hydrogen produced results in the emission of several kilograms of carbon dioxide, making it essentially an extension of fossil fuel use.

II. Blue Hydrogen: Putting a Mask on Gray Hydrogen

Blue hydrogen is produced by adding a carbon capture and storage system to the gray hydrogen process, which captures carbon dioxide and buries it. While it’s effective at reducing emissions, the capture rate isn’t 100 percent, and the additional equipment and energy consumption mean that both costs and the risk of leaks must be taken into account.

III. Green Hydrogen: The Ultimate Solution, but Expensive

Green hydrogen is produced by using electricity generated from renewable energy sources to electrolyze water, breaking it down into hydrogen and oxygen. The entire process is carbon-neutral, but unfortunately, the cost is largely determined by the price of electricity. Green hydrogen is cost-effective only when produced using inexpensive wind and solar power; if electricity is expensive, it becomes prohibitively costly.

Type Ingredients Carbon Emissions Approximate Cost Current Situation
Gray hydrogen Natural Gas/Coal High Approximately $1–2 per kilogram Current Leading Players
Blue Hydrogen Natural Gas + CCS Chinese Approximately $2–3 per kilogram Demonstration
Green Hydrogen Renewable Electricity Near-zero Approximately $3–6 per kilogram Initial Expansion

IV. Who Will Be the Main Force of the Future?

Arguing over “who wins” is actually of little significance. Green hydrogen is the ultimate goal, provided that renewable electricity is cheap enough; blue hydrogen is a practical choice during the transition period; and gray hydrogen will remain the dominant source for quite some time. The industry generally considers bringing the cost of green hydrogen down to less than $2 per kilogram to be the threshold at which it becomes truly competitive.

A more realistic approach is to consider different scenarios: for industrial green hydrogen, where emissions reductions are difficult to achieve, blue hydrogen should serve as a backup during the transition period, while gray hydrogen should be phased out gradually.

So in the grand scheme of hydrogen energy, no single type will dominate; rather, green hydrogen will gradually grow in prominence, blue hydrogen will fill the gaps, and gray hydrogen will take a back seat.