More and more often we hear about hydrogen strategies of individual countries. From various media, it is known that plants for hydrogen production are being planned and some have already been completed. Not only is the number of hydrogen projects increasing, but they are also becoming more concrete. Finally, recent events from around the world have led to a push for faster hydrogen establishment.

Not all Hydrogen is the same

Even though we talk and read about hydrogen all the time, it is not understood in the same way. Hydrogen is differentiated according to its production. Depending on which one is referred to, the prospects for a hydrogen economy look different.

As things stand, steam reforming (conversion of natural gas and water vapour into carbon dioxide and hydrogen) is currently the defining production process for hydrogen. However – and this is of great importance – the use of a fossil fuel (methane in this case) will neither solve the issue of the neutrality towards the environment nor the finiteness or the geographical availability of the primary energy source. Saying so, there are processes that eliminate the issue with the neutrality towards the environment utilizing CCS- or CCU-technology (carbon capture and storage/use) while obtaining blue hydrogen. Still, two significant issues remain.

And this is where green and red hydrogen come into play. Through the electrolysis of water, oxygen and hydrogen can be produced on a large scale, but also on a smaller one.  With the help of electric current, the water is split into two components in the electrolyzer. Green hydrogen requires electricity from renewable sources (wind, PV, and hydropower) as primary energy. Red hydrogen is characterized using nuclear power as the primary source of energy and is therefore controversial – countries such as Austria and Germany are considered critical of nuclear energy. 

There are also other forms of hydrogen production, but these are mostly only a derivative of the methods already mentioned.  Worth mentioning is the research in the field of Photoelectrosynthetically Active Heterostructures (PAH), which produce hydrogen directly from solar energy. However, this is still in its infancy and a market launch is not yet foreseeable.

Green hydrogen – use case and vison

In general energy discussions, hydrogen is mostly referred to as a possible solution for energy storage – more accurately, the storage for energy surplus. Another sector in which hydrogen gets mentioned is mobility. The market already offers such vehicles (FCVs – fuel cell vehicles) based on hydrogen. While heavy vehicles have a better chance of manifesting themselves, smaller vehicles could fall behind electric vehicles as they have a much larger share in the market for now. However, looking at the current use of grey hydrogen, one can see that it is used almost entirely in the field of materials production and the chemical industry (steel production, cracking, and various synthesis). 

If we consider the largest sectors of our globalized economy and respectively at the ones with the largest carbon dioxide emission, namely energy (heat and power), industry and transportation. All these sectors have something in common – hydrogen is used or has the possibility to be used.

In terms of the energy sector: Hydrogen could play the role of a secondary energy carrier, where primary energy from renewable sources is used directly for hydrogen production. With this in mind, hydrogen would reduce dependencies on fossil sources and be available almost everywhere and at any time. As for the mobility hydrogen both as fuel and a component in alternative fuels could lead to a dominant share in the sector. Cars, ships, planes, and trains – all have the possibility and use cases where hydrogen would be playing an economically justifiable solution. Finally, the industry already has the demand for hydrogen which leads to an even stronger driving force for shifting the global economy towards green hydrogen.

Technical & Economic Challenges

Transporting and storing hydrogen poses fewer difficulties than producing it as conventional methods barely differ from the known in the field of natural gas. Yet transportation is widely viewed as critical for a general hydrogen deployment. First, transport capacity is lower (for the same size of natural gas) and second the energy losses are much higher due to the low energy density of hydrogen per volume (note: hydrogen has three times the energy density of natural gas if calculated per kilogram). There are some newer technologies which reduce these issues or even eliminate them, such as LOHC (liquid organic hydrogen carrier) and metal hybrid storage (stationary). Nonetheless, the infrastructure for these is not yet available at the necessary scale and pipelines are still more convenient for energy policy makers.

Missing infrastructure leading to no driving force for private equity to invest in massive production of green hydrogen – also known as chicken-and-egg situation – reveals the real issue with a global hydrogen deployment. Supply waits for demand and demand waits for supply. Resulting from this situation several issues are currently mainly inhibiting hydrogen moving forward at a faster speed. One point to mention which is derived from the chicken-and-egg situation is the higher price of green hydrogen per kilogram. It is caused by higher production cost for electrolyser as production capacity is at a low level, which is again a result of nonsignificant demand of hydrogen from enterprises (B2B) serving customer needs. Considering current prices on the various energy solutions, this nonsignificant demand on hydrogen in business is reasonable as enterprises preliminary goal is to increase short-term return (which is totally understandable). Putting it in other words, either policy makers kick-start hydrogen production or private equity plays the “high risk and greater return” game. Either way increasing the production capacity would lead to a decrease in price on the customer side and competitiveness with other fuels would be given.

Not mentioning some other issues on hydrogen does not mean that they are not visible, but many of them are by-products of the transportation-, infrastructure-, and the chicken-and-egg situation.

The implementation of hydrogen technologies from a socioeconomic perspective

Why should we take a socioeconomic perspective in an essay on hydrogen technologies? Because it makes sense, especially as the welfare of our contemporary society is closely linked to the availability of cheap energy. But dwindling natural resources on the one hand and climate change threatening social security on the other are currently the greatest challenges to our societal prosperity. Some believe that there is a technical answer to all problems. Others point out that unsustainable lifestyles and the resulting greenhouse effect are the negative consequences of these technological advances. We do not persist in this conflict from a socio-economic perspective – it is not a matter of right or wrong, but we point out that the promotion and implementation of new technical propositions also produces “winners” and “losers”. From this perspective, we put these technical promises to the socio-economic test of their sustainability (ecological, economic and – above all – social). It is not without reason that the decoupling of the gross domestic product (GDP) – this indicator describes the economic value added of a country per capita – from non-sustainable energy sources is a central goal of the green transition. At this point, socioeconomic questions become truly relevant: Who pays the costs of investments and how are profits distributed? How can financially disadvantaged households pay their electricity and heating bills in the future? How do the key actors – the state and private sector – deal with those households suffering from energy poverty? What happens when geopolitical tensions expose old technological path dependencies – especially the inflexibility of infrastructures?

The socioeconomic perspective directs the spotlight on the complexity of climate change, which is also expected and propagated by the Agenda 2030  as a “just transition”. Or put in other words: The challenges of the energy transition allow the “old discourse” of “equitable distribution”  to flare up again within this context. In this respect, such a perspective is courageous, especially since it puts its finger on the sore points of sustainable social development and points to the gaps and obstacles apart from promises of technology and prosperity. However, such a perspective is by no means against progress, on the contrary: it highlights the need for intelligent actor constellations, for example those environmental-governance-arrangements that accelerate the green transition (for example through funding regimes) and promote social cohesion – a term that describes social cohesion.

The limits of technological efficiency using the example of the mobility sector

The mobility sector is extremely relevant in terms of energy policy and is a good example for linking the explanations on hydrogen technology with the socioeconomic perspective described above. The current EU-2050-strategy calls for green, clean and safe mobility throughout Europe. In fact, the logistic/mobility sector is a problem child, especially since decarbonisation is stagnating overall despite technical progress (more efficient propulsion, smart systems). In some countries, such as Austria, emissions in the transport sector have even increased significantly since 1990.

An important aspect why the improved efficiency of vehicles remains invisible in the aggregated figures is the “rebound effect”.  which is known in the jargon of economics. The rebound effect describes a socio-economic dilemma: efficiency gains are negatively compensated due to a change in consumption. In simpler terms: If cars consume less energy, the price per kilometer also decreases, which in turn motivates users to drive further distances. This principle is also very evident in the production and consumption practices of recent decades because one pillar of prosperity is cheap transport – which has increased globally based on more efficient technologies. The rebound effect is a sore point because it indicates a deeper phenomenon, namely economically and ecologically irrational human behavior. If halving the input leads to a doubling of demand, then the idea of efficiency is destroyed by human behavior. Especially since mobility is a driving force of social prosperity – the example of Austria shows this very well in the enormous importance of tourism – the decarbonization of the mobility sector in the sense of a technological changeover is crucial. The negative consequences of theoretically unhindered mobility are a separate issue, but technologies such as green hydrogen can be a crucial element for a completely green transport sector.


Green Hydrogen has the potential of general establishment all over the world. It was here before and it is still here, causing no harm or even dependencies on others. If policymakers decide to go with green hydrogen, it is possible that the “infinite oil” acts as a waterfall on a large share of sectors of today’s economy. Nonetheless, these potentials should also be analyzed in terms of their socioeconomic causes and effects, in other words, to what extent they promote our prosperity, who the winners and losers are, and to what extent green hydrogen can revolutionize crucial economic fields, such as the mobility sector.  Not only have policymakers the hand on the hydrogen button but also the private equity. Hydrogen is already present.