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Why The World is Excited About Green Hydrogen

August 24, 2023
x min read

Hydrogen is in nearly everything, quite literally. It’s the most abundant chemical element that exists and is in nearly three quarters of all matter.

But, what exactly is green hydrogen?

Called by many the “energy of the future” green hydrogen has been a hot topic of discussion for everyone from startups in Silicon Valley to politicians in Washington DC.


  • Hydrogen has many current uses in the world, from fertilizer to metal refinement to rocket fuel. But it’s biggest opportunity yet is in helping decarbonize the planet
  • There are three different types of hydrogen: grey hydrogen, blue hydrogen and green hydrogen. The reference of colour correlates to their harm on the environment
  • Grey hydrogen comes from reforming fossil fuels, specifically natural gas. From a cost perspective, this is by far the cheapest way to produce hydrogen
  • Blue hydrogen is still derived from fossil fuels, however it is slightly less emission heavy. The process of producing blue hydrogen allows for some of the CO2 emissions to be captured and stored
  • Green hydrogen, which is often referred to as renewable hydrogen, is produced from the electrolysis of water. This means that the entire process is renewable, with zero emissions of any kind

Why it matters:

  • Almost all hydrogen today- and the world consumes a lot of it, nearly 70M tonnes - is grey hydrogen and has an enormously harmful impact on the environment due to emissions
  • Emissions are so extreme from hydrogen produced from fossil fuels that it creates more emissions than all the emissions combined of approximately 300 million people per year
  • The production method of hydrogen is crucially important to the impact it has on the climate but right now less than 1% of all hydrogen being consumed globally is green hydrogen
  • Renewable hydrogen can be stored for a long time and is also easily transportable, due to how light a compressed hydrogen tank is

How does it work:

  • Green hydrogen is made from electrolysis, which is the process of using an electrical current to separate elements
  • Electrolysis can be powered by renewable energy, such as wind and solar
  • Essentially, the entire process of electrolysis comes down to using an electrical current to separate a water molecule into two parts: oxygen and hydrogen
  • From there, the process of converting renewable hydrogen into an actual energy source that is usable comes down to storing it in purpose-built tanks, where it begins the process of binding with oxygen
  • The critical difference is the only by product from this entire process is water, which is what allows it to be zero emissions

What it means:

  • The US Inflation Reduction Act has put attention onto the future of renewable hydrogen and the importance of building out more infrastructure to support it
  • Venture funds and startups alike are beginning to accelerate innovation in the space, as there are tax credits and incentives to offset capital investment
  • Green hydrogen is poised to become one of the fastest growing areas in climate tech
  • The potential use cases for green hydrogen are immense, from steel manufacturing to an alternative fuel for jets

Who is making moves:

  • Breakthrough Energy Ventures, the venture fund founded by Bill Gates, has backed Electric Hydrogen, a startup building factories for making electrolyzers for green hydrogen
  • BP Ventures, the venture capital arm of BP Oil, recently led the Series A round in green hydrogen company Advanced Ionics, as part of big oil’s transition into renewables
  • Australian startup Hysata recently raised $23.9M to transform energy production in Australia, which included participation for government owned electricity company Stanwell Corporation
  • Clean tech aviation startup Universal Hydrogen recently completed a trial flight where an aircraft flew largely on the power of one hydrogen powered engine, enabling a look into the future of carbon free flying

The fine print:

  • As it stands today, green hydrogen is significantly more expensive or produce than grey hydrogen
  • As a consequence, in order for renewable hydrogen to increase production capacity to where it can replace grey and blue hydrogen, there will need to be an exponential increase in venture capital funding
  • The amount of infrastructure that needs to be built is immense, from networks to transport hydrogen to facilities for electrolysis

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