Starting with a thought:
Human beings are driven by a constant insatiable need for resources to sustain everyday activities and fulfil aspirations built over decades. In modern times, these human aspirations have led to rise in enormous amount of energy use and therefore, Climate Change. However, Society continues to split across people who are strong proponent of Climate Change on one side and Contrarians, who question such theory on the other. The fact - Climate Change or Global Warming, is part of a cycle wherein Glacial Maximum is separated from the adjacent ones by 41,000 years (based on the Cycle of Axis tilt). This does not warrant any requirement of Alternate Fuels, right? Unfortunately, Wrong.
The Case for Alternative Fuels:
- The Cost of Exploration of Oil and Natural Gas, even from the Known Recoverable Sources, is higher outside the Middle East area, which increases the World’s dependence on few countries forever. An Alternate Fuels will not only give an opportunity for other countries to prosper but will also reduce their Import Bills.
- This will be Bad News for Contrarians. With a whopping majority of nations becoming Signatories to Kyoto Protocol & Doha Agreement respectively, the burden of buying Emission Allowances from other Countries with Excess Credits becomes a looming threat for countries to reduce their carbon footprint. This necessitates the usage of Alternate Fuels.
- By now, it is evident that BEVs are not the Silver bullet for negotiating with the Elephant in the room because of batteries reliance on hazardous mining and dependence on a few countries like China, Democratic Rep. of Congo (DRC) and Chile per se. Further, conventional way of electricity production in many countries increases carbon footprint with BEV adoption, esp. in EMDEs. On top of that, Nascent Infrastructure is posing Range Anxiety among BEV users.
Like the three key issues mentioned above, there are plethora of other issues which makes the search for Alternate Fuels inevitable.
Hydrogen as an Alternative Fuel
Hydrogen - A Buzzword in the world of Energy:
- Hydrogen has become a magic fuel which can power Cars, Trucks, Trains, Ships & Planes.
- Let’s start with the basics. Hydrogen sits at the very top of the Periodic table and is the most abundant element. However, it is a highly reactive gas and exists only in combination with other elements.
- Hence, these bonds need to split through electrolysis to get pure Hydrogen.
- From pure Hydrogen, a Fuel Cell can be powered, one of the most promising Hydrogen based technologies.
- A Fuel Cell works like a battery running on Hydrogen and Oxygen. They react to supply Electricity that could power a vehicle, with the only by-products being Water and Heat/Energy.
- All this is not new. Fuel cells were initially invented in 1800s.
- In the 1960s, GM built a Fuel-cell powered Van that ran on Hydrogen.
- In current times, the produced Hydrogen is majorly used to make other products like: Fertilisers, Petrochemicals.
- As the world is slowly waking up to reduce emissions & reach Net Zero, the issue at hand in adopting Hydrogen is that producing this fuel is not 100% Eco-friendly.
Colours of Hydrogen:
- Black & Brown Hydrogen: Dirtiest options made from Coal (Black or Brown) with no Carbon capture. They release significant CO2 and Carbon Monoxide.
- Grey Hydrogen: Less polluting than Black/Brown, it's produced from Natural Gas through Steam Reforming, although it dominates the market but still generates emissions.
- Blue Hydrogen (Clean Hydrogen): Made from Natural Gas with CCS. Considered "Carbon Neutral" by few, it might be more accurate to call it "Low Carbon" as CCS technology isn't perfect.
- Green Hydrogen (Cleanest Hydrogen): It's produced from Renewable Sources (Solar, Wind) through electrolysis, resulting in zero emissions during production. It is the cleanest option, but adoption is currently limited due to cost considerations (production cost ranges from $3.5 to $5.3 per Kg). However, with falling Renewable Energy costs, Green Hydrogen shall be a major player in future clean energy development.
- Other Colours: Turquoise Hydrogen (Methane Pyrolysis), Pink Hydrogen (Nuclear energy), and Yellow Hydrogen (mostly solar-powered electrolysis).
Apart from Coloured Hydrogen system, a better approach is to consider its "Carbon intensity" across its entire lifecycle. For instance, Hydrogen from RNG is not easily categorized by Colour but has lower emissions.
Application of Hydrogen Fuel Cells in Public Transportation
Cost/Benefit Analysis:
- Renewable Energy Sources like Solar or Wind to produce Hydrogen via electrolysis is significantly cheaper than using fossil fuels like Coal.
- Here's a breakdown of the cost per day for operating 20 vehicles, each traveling 200 km, with 7KG of Hydrogen being used for covering a distance of 100 km:
- Photovoltaic (Solar): €252 - €560 (depending on efficiency of converting electricity to hydrogen that ranges between 45-100 KWh/Kg of Hydrogen produced)
- Wind: €378 - €840 (depending on efficiency)
- Coal: €756 - €1,680 (without CO2 surcharge)
- Coal-fired power plants are the most expensive option, esp. when factoring in the potential cost of Carbon emissions.
- Hydrogen powered vehicles are generally cheaper to operate than Diesel ones, esp. if Hydrogen is produced using Renewable sources.
- The biggest savings is achieved with Solar power, offering cost reductions of 70%-87% compared to Diesel.
- Wind power follows with savings of 56%-80%. Even Coal proves cost-competitive (without CO2 surcharge) for certain Electrolysis efficiencies.
- Here’s a catch: Using Electricity directly at Retail prices for Electrolysis makes Hydrogen more expensive than Diesel in most cases. Cost of using Retail Electricity ranges between €1,512 - €3,360, while Diesel Cost stands at €1,892.
- Overall, Hydrogen has promising prospects for clean and cost-effective for hard to decarbonise sectors like Urban Transportation, but the key is to ensure its production using Renewable Energy sources.
- Producing Green Hydrogen, the clean version, involves splitting water with electricity from renewable sources like Solar or Wind. This process is ~70-80% efficient & currently costs €3.6-€5.3 per kg to produce.
- The good news is that the cost will fall significantly by 2030, reaching ~€1.8 per kg.
Yet so close, yet so far
2Q26 Current situation: Currently, Hydrogen is used in selected Industries and is not yet making a big impact on clean energy transitions.
- Opportunities: The International Energy Agency (IEA) identified few areas where existing infrastructure & policies can be leveraged to rapidly increase Hydrogen use ("value chains").
- Policy needs: Regardless of the chosen value chains, specific policy actions are needed across key areas to drive Hydrogen adoption.
- Collaboration: International cooperation between governments will be beneficial to develop Hydrogen markets.
Below are the examples of adoption of Hydrogen in the sectors which are one of the biggest emissions generators.
Hydrogen in Public Transport:
- By strategically choosing production locations and utilizing existing infrastructure like pipelines and gas networks, Hydrogen transport costs can be brought down.
- Hydrogen vehicles, much like conventional Internal Combustion-engine vehicles, can be refuelled quickly at specialized stations, offering convenience for long-distance drivers & those concerned about towing capabilities or extreme temperatures affecting Battery performance.
- All these conditions are best provided by Public Transport, which is more responsive to the challenges of the Environmental & Social sphere of sustainable development.
- Also, Hydrogen in Public Transport can be more economically sustainable than Individual Transport, as a Hydrogen Fuel tank requires more space than conventional fuels.
- Still, only 558 Hydrogen Buses were registered in Europe during FY 2025, out of which 336 were registered in Germany. This number showcases a strong growth of 47.6% on YoY basis. Although the number looks great in terms of Percentage terms, Absolute numbers paint a bleak picture in which we still can see shadows of Affordability and Operational issues as part of its background.
Hydrogen for Shipping Industry:
- Hydrogen can be used to clean-up Heavy Transports such as Shipping.
- A study shows that almost all Container Ships moving from China to the US can use Hydrogen Fuel Cells. However, they might have to reduce Cargo Space by ~5.0% or add a Refuelling stop.
- After the IMO 2020 Regulations and Retrofitting passage, adoption of Hydrogen as a Fuel in Shipping will rise at a faster rate.
Hydrogen for Airline Industry:
- In 2020, the 1st Commercial-sized Hydrogen-powered plane took-off and Airbus is working on 3 Hydrogen-powered models which might be ready to deploy by 2035.
- Long-haul flights would be a challenge. However, Short to Medium Haul flights on Hydrogen could cut Aviation emissions by 33.0%.
Cost/Benefit Analysis:
- Renewable Energy Sources like Solar or Wind to produce Hydrogen via electrolysis is significantly cheaper than using fossil fuels like Coal.
- Here's a breakdown of the cost per day for operating 20 vehicles, each traveling 200 km, with 7KG of Hydrogen being used for covering a distance of 100 km:
- Photovoltaic (Solar): €252 - €560 (depending on efficiency of converting electricity to hydrogen that ranges between 45-100 KWh/Kg of Hydrogen produced)
- Wind: €378 - €840 (depending on efficiency)
- Coal: €756 - €1,680 (without CO2 surcharge)
- Coal-fired power plants are the most expensive option, esp. when factoring in the potential cost of Carbon emissions.
- Hydrogen powered vehicles are generally cheaper to operate than Diesel ones, esp. if Hydrogen is produced using Renewable sources.
- The biggest savings is achieved with Solar power, offering cost reductions of 70%-87% compared to Diesel.
- Wind power follows with savings of 56%-80%. Even Coal proves cost-competitive (without CO2 surcharge) for certain Electrolysis efficiencies.
- Here’s a catch: Using Electricity directly at Retail prices for Electrolysis makes Hydrogen more expensive than Diesel in most cases. Cost of using Retail Electricity ranges between €1,512 - €3,360, while Diesel Cost stands at €1,892.
- Overall, Hydrogen has promising prospects for clean and cost-effective for hard to decarbonise sectors like Urban Transportation, but the key is to ensure its production using Renewable Energy sources.
- Producing Green Hydrogen, the clean version, involves splitting water with electricity from renewable sources like Solar or Wind. This process is ~70-80% efficient & currently costs €3.6-€5.3 per kg to produce.
- The good news is that the cost will fall significantly by 2030, reaching ~€1.8 per kg.
Closing Thoughts - Why Hydrogen Still Matters
In a nutshell, Sustainable Transport involves meeting two minimum requirements:
- It must not risk the long-term ecological balance.
- It meets basic Mobility needs or equal access to certain minimum Mobility levels.
So, it boils down to one question: Is Hydrogen powered Fuel-cell a solution for Future Public Mobility in next decade? It’s safer to say, “May be Yes…May be No”. However, there remains a bleak outlook for any worthwhile Hydrogen Fuel Vehicle Launches in next 5 years. But, as it goes with BEVs v/s Hybrids, wherein Hybrids rules the roost today, but BEVs will be neck-to-neck with Hybrids in the years ahead, supported by increase in Battery Charging Infrastructure. Similarly, Hydrogen Fuel Cell Vehicles will also start making a footmark in Future Mobility with Innovations in this field. As far as Total Lifecycle Cost parity of Hydrogen-Fuel Cell Vehicles is concerned compared to Gasoline Vehicles, Hydrogen Fuel Cell Vehicles may struggle to achieve the same even by 2030, unless Hydrogen Production & Infrastructure costs fall dramatically.
For that, we can still expect some Silver lining with respect to the recent developments in Clean Hydrogen market. Committed investment in clean hydrogen has now surpassed $110 bn across 510 projects, up $35bn from last year, growing over 50% y-o-y since 2020. There are now 1,749 clean hydrogen projects announced globally across the value chain. Of these 1,749 projects, around 1,160 projects have publicly announced their Commercial Operation Date (CODs) by 2030, with Europe having the largest number of projects with CODs by 2030, followed by North America and China. If we account for FEED, Feasible and Announced Projects, then the tally of Investment pipeline in clean Hydrogen projects to be ready by 2030 would fall in the ballparks of $695 bn.
The Global Clean Hydrogen market is poised for remarkable expansion, reflecting its growing importance in the transition toward a low-carbon economy. Valued at ~$4.47 billion in 2025, the market is projected to surge at an impressive CAGR of 33.2% over the next decade, reaching an estimated $78.8 billion by 2035.
At the heart of this growth is Electrolysis, which has emerged as the leading Production method. Its scalability and seamless integration with renewable energy sources make it a cornerstone in the push for truly green hydrogen, significantly contributing to carbon emission reduction efforts. Meanwhile, Biomass reforming is gaining momentum as a promising alternative, leveraging organic materials to produce hydrogen and offering a complementary pathway within the evolving energy landscape.
On the Application front, Fuel cells dominate the clean hydrogen market, benefiting from widespread adoption across multiple sectors. Their high efficiency and low emissions make them particularly attractive for transportation - ranging from commercial fleets to consumer vehicles - as well as for stationery and backup power generation. This segment continues to attract significant investment, supported by expanding Infrastructure and advancements in hydrogen production and storage technologies.
So, here is the take on this perplexing question on Dial F for Future?
- Hydrogen is a specialised complement, not a competitor, to Batteries for Public Transport.
- In Urban buses and light duty, BEVs will dominate on pure economics. Hydrogen here is the policy or use case driven and will remain subsidy sensitive through at least 2030.
- Hydrogen’s highest conviction Transport roles are in deep sea shipping and segments of aviation. It will also play a key role industrial decarbonisation (e.g. steel and cement manufacturing), all of which value energy dense molecules and where electrification is structurally harder to implement. For instance, Steel Industry accounts for 7% of Global CO2 emissions, which necessitates companies to seek cleaner alternatives and the fact that Hydrogen-based processes can reduce emissions by 90% will drive investments into Clean Hydrogen Market.
- For Investors, the focus should be on Infrastructure, Industrial offtake, and regions with world class renewables rather than mass market FCEVs.
The following are a few global hydrogen flagship projects:
| Project name | Region / Main location | Investment / Project value (Mn) | Status |
|---|---|---|---|
| Agder Hydrogen Hub | Norway | €41.70 | Under construction |
| AdvancedH2Valley | France | €64 | pre-FID (planning, engineering, de-risking, etc.) |
| Amber Hydrogen Valley | Poland | €185 | pre-FID (planning, engineering, de-risking, etc.) |
| Andalusian Green Hydrogen Valley (Huelva + Cádiz) | Spain | €3,000 | pre-FID (planning, engineering, de-risking, etc.) |
| BalticSeaH2 | Finland | €3,950 | Under construction |
| Basque Hydrogen Corridor (BH2C) | Spain | €900 | post-FID (financing, tendering, etc.) |
| Green Hysland | Spain | €50 | Fully operational |
| Edmonton Region Hydrogen Hub | Canada | €30,000 | Project concept developed |
| NEOM GREEN HYDROGEN | Saudi Arabia | €40,000 | Under construction |
Source: Hydrogen Valley Platform
Sources
The Future of Hydrogen – Analysis - IEA
Grey, blue, green – the many colours of hydrogen explained | World Economic Forum (weforum.org)
Electricity requirement for production of 1KG of Hydrogen:
Hydrogen production: exploring the various methods and climate impact - 3Degrees (3degreesinc.com)
Costs and Fuel cost comparison:
Hydrogen Fuel Cost vs Gasoline (heshydrogen.com)
Fortune India: Business News, Strategy, Finance and Corporate Insight
Use of hydrogen in public transport systems - ScienceDirect
Hydrogen in Public Transport Last Point:
Fuel cell bus projects in the world: what's going on?
Peak Fuel Cell Bus Deliveries in the EU Occurred in 2025 - CleanTechnica
Global Warming - True or not
Climate change - Global Cooling, Ice Age, Human Impact | Britannica
BMW & TOYOTA:
Toyota accelerates hydrogen plans, goes slow on Electric Vehicles (msn.com)
Toyota Introduces Next-Gen Fuel Cell with Diesel-Like Durability
Hydrogen Fuel Bus Registration:
Green Hydrogen Pricing:
https://www.sciencedirect.com/science/article/abs/pii/S0360319925016234
Green Hydrogen Projects:
https://h2v.eu/hydrogen-valleys#cat_1222
Investment in Clean Hydrogen:
Clean Hydrogen Market Size:
Clean Hydrogen Market Size, Growth, Trends Report 2035
Total Hydrogen Market Size:
Fuel Cell Market Size, Share | Industry Report [2026-2034]
Definitions:
RNG - Renewable Natural Gas (RNG), or biomethane, is a pipeline-quality gas fully interchangeable with conventional natural gas, produced by purifying biogas derived from decomposing organic waste (landfills, manure, wastewater).
List of Abbreviations:
- BEV - Battery Electric Vehicles
- DRC - Democratic Rep. of Congo
- EMDE - Emerging Market and Developing Economies
- RNG - Renewable Natural Gas
- CCS – Carbon Capture and Storage
- IEA - International Energy Agency
- FCEV- Fuel Cell Electric Vehicle
