A practical transition framework for industrial decarbonisation
Heavy industry is under structural pressure to reduce emissions while maintaining production reliability and cost competitiveness. Steel, ammonia, refining, glass and cement together account for a significant share of global CO₂ emissions. These sectors rely on high-temperature heat and carbon-based chemical reactions that are difficult to electrify.
Hydrogen is one of the few scalable tools capable of addressing both energy and feedstock requirements.
Global hydrogen demand has reached nearly 100 million tonnes per year. Less than 1% is currently produced from low-emission sources [1]. The transition challenge is therefore substantial.
The current debate is often framed as a choice between green and blue hydrogen. In practice, the issue is more nuanced. Industrial decarbonisation will depend on regional resource availability, infrastructure readiness, regulatory frameworks and system integration capability.
Understanding the production pathways
Green hydrogen and electrolysis technologies
Green hydrogen is produced through water electrolysis powered by renewable electricity. When powered by additional renewable capacity, it can achieve very low life-cycle emissions [1]. However, its climate benefit depends on the electricity carbon intensity and compliance with additionality requirements [5].
Three electrolyser technologies dominate industrial deployment.
Alkaline Water Electrolysis is the most mature solution. It uses liquid alkaline electrolytes and non-precious-metal catalysts, such as nickel. This reduces dependence on scarce materials and lowers capital cost. Its limitation is a slower response to fluctuations in renewable energy input.
Proton Exchange Membrane electrolysis offers a rapid dynamic response and higher current density. This makes it suitable for integration with variable renewable generation. Its constraint is the use of platinum group metals, particularly iridium. Global iridium production is limited, creating long-term scaling concerns
Anion Exchange Membrane electrolysis aims to combine the flexibility of PEM with the material advantages of alkaline systems. Although still in commercial development, AEM technologies reduce reliance on scarce catalysts and represent a strategic diversification pathway [4].
Electrolyser selection affects footprint, operational flexibility, water-purification requirements, and system integration complexity. Industrial applications require alignment between hydrogen production profiles and process demand.
Blue hydrogen and carbon capture
Blue hydrogen is typically produced from natural gas via steam methane reforming or autothermal reforming, combined with carbon capture and storage [4]. Autothermal reforming enables higher capture rates due to more concentrated CO₂ streams.
Its emissions profile depends on two critical parameters:
• Methane leakage in the upstream gas supply
• Verified CO₂ capture efficiency
Methane is a potent greenhouse gas. Leakage rates above very low thresholds can significantly erode the climate benefit of blue hydrogen [6]. Similarly, capture rates below 90–95% undermine long-term alignment with decarbonisation [9].
Blue hydrogen can deliver meaningful emission reductions when methane management and capture efficiency are tightly controlled. Without those conditions, life-cycle emissions increase.
Life-cycle emissions and system integrity
Life-cycle assessment provides a clearer comparison than colour labels.
Grey hydrogen typically results in 12-14 kg CO₂e per kilogram of hydrogen produced [6].
Blue hydrogen with high capture rates may reduce emissions to approximately 2.4-4.5 kg CO₂e per kilogram, depending on methane intensity [6].
Wind-powered green hydrogen can achieve values of roughly 0.6-1.7 kg CO₂e per kilogram when sourced from renewable sources [6].
However, sensitivity is significant.
By definition, green hydrogen is produced exclusively from renewable electricity. In practice, however, electrolyser operation in fossil-heavy grid environments without additional renewable capacity can result in significantly higher life-cycle emissions [5].
Hydrogen leakage also has indirect warming effects through interactions with atmospheric chemistry [6]. Leakage management is therefore essential across production, transport and storage systems.
For industrial operators, certified carbon intensity will increasingly determine competitiveness in global supply chains.
Cost dynamics and economic viability
The Levelised Cost of Hydrogen remains the primary driver of adoption.
In 2025, blue hydrogen in regions with low natural gas prices ranges from approximately $1.50 to $2.50 per kilogram [3].
Green hydrogen typically ranges from $4.50 to $12.00 per kilogram in many markets, largely determined by the cost of renewable electricity [1].
Electricity price is the dominant cost component. Electrolyser capital expenditure reductions alone will not achieve parity without a continued decline in renewable energy cost.
Policy frameworks influence regional competitiveness. In the United States, production tax credits are expected to significantly reduce green hydrogen costs over time [2]. In the European Union, carbon pricing and hydrogen funding mechanisms support renewable pathways [5].
Cost convergence is projected progressively toward 2030 in favourable regions, with broader parity anticipated during the 2030s [7].
Industrial strategy must therefore account for both present economics and expected cost trajectories.
Sectoral integration pathways
Hydrogen deployment varies by industrial sector.
Steel
Hydrogen-based Direct Reduction of Iron replaces carbon monoxide as the reducing agent with hydrogen [4]. This pathway enables near-zero emission steel when powered by green hydrogen.
A single major steel plant may require gigawatt-scale renewable capacity to operate fully on green hydrogen.
Blue hydrogen may reduce emissions in the short term. However, concerns remain about long-term compatibility with strict zero-carbon material standards in automotive and construction supply chains [8].
Ammonia and chemicals
Ammonia production consumes more than half of the global hydrogen supply [4]. The downstream Haber–Bosch synthesis process remains unchanged regardless of hydrogen origin.
This makes ammonia one of the most straightforward sectors for hydrogen substitution.
Both blue and green pathways are technically viable. Cost, policy, and carbon pricing will determine the speed of adoption.
Glass and cement
In glass production, hydrogen acts as a combustion fuel. Hydrogen flames have lower emissivity than natural gas flames, altering heat transfer inside furnaces [4]. Burner design adjustments and temperature control systems are required to maintain product quality.
In cement manufacturing, hydrogen combustion increases the concentration of water vapour, potentially accelerating refractory wear [4]. Deployment remains at earlier readiness levels compared to refining or ammonia.
Hydrogen integration in these sectors requires engineering adaptation rather than simple fuel substitution.
Infrastructure and material constraints
Scaling hydrogen production requires parallel development of infrastructure.
PEM electrolysers rely on iridium, a scarce material with limited annual production [4]. Catalyst innovation and broader deployment of alkaline and AEM systems are necessary to mitigate long-term supply constraints.
Electrolysis requires approximately 9 litres of water per kilogram of hydrogen based on the stoichiometry of water splitting [10]. Actual water intake depends on feed water quality and system design. In systems with effective recirculation, additional water demand can be limited. Where feed water quality is low, purification losses may substantially increase raw water intake, in some cases requiring multiple litres of raw water to produce 1 litre of purified process water.
Pipeline transport is significantly more cost-effective than liquefied hydrogen transport [4]. Long-term industrial deployment requires dedicated hydrogen networks and geological storage to balance seasonal demand [9].
Infrastructure planning must align with industrial demand, renewable expansion and regulatory timelines.
Managing the transition
The debate between green and blue hydrogen is not binary.
Blue hydrogen can deliver near-term emissions reductions where carbon storage and gas infrastructure are in place [9]. However, long-term reliance risks carbon lock-in if methane leakage or capture performance underperforms [8].
Green hydrogen aligns directly with climate neutrality objectives. Its scalability depends on renewable expansion, improvements in electrolyser efficiency, and integrated system design.
Long-term projections indicate that green hydrogen is likely to gain cost and volume advantage over time [7].
Industrial decision-making should therefore balance immediate emission reductions with long-term structural alignment.
From analysis to implementation
Hydrogen integration requires structured engineering assessment and phased deployment.
Industrial operators should:
• Evaluate process compatibility and hydrogen purity requirements
• Assess renewable electricity sourcing and grid carbon intensity
• Verify carbon capture performance where applicable
• Deploy modular systems allowing gradual scaling
Hydrogenera develops alkaline electrolyser systems designed for industrial integration and on-site production of renewable hydrogen. The focus is on operational reliability, efficiency and scalable deployment aligned with long-term decarbonisation strategies.
To learn more about Hydrogenera’s green hydrogen technologies and industrial solutions, visit https://hydrogenera.eu.
References
- International Energy Agency: Global Hydrogen Review 2025 https://www.iea.org/reports/global-hydrogen-review-2025
- International Energy Agency: Low-emissions hydrogen projects are set to grow strongly https://www.iea.org/news/low-emissions-hydrogen-projects-are-set-to-grow-strongly-despite-wave-of-cancellations-and-persistent-challenges
- Decarbonfuse: Blue Hydrogen Just Won 2025: https://decarbonfuse.com/posts/blue-hydrogen-just-won-2025-10x-more-than-green
- MDPI: A Global Review of Blue and Green Hydrogen Fuel Production Technologies: https://www.mdpi.com/2673-3994/6/4/88
- Wood Mackenzie: Carbon intensity regulation to make or break global low-carbon hydrogen market https://www.woodmac.com/press-releases/2024-press-releases/carbon-intensity-of-hydrogen/
- RSC Publishing: Climate change performance of hydrogen production based on life cycle assessment https://pubs.rsc.org/en/content/articlehtml/2024/gc/d3gc02410e
- BloombergNEF: Green Hydrogen to Undercut Gray Sibling by End of Decade: https://about.bnef.com/insights/clean-energy/green-hydrogen-to-undercut-gray-sibling-by-end-of-decade/
- IEEFA: Blue hydrogen: A false hope for steel decarbonisation https://ieefa.org/sites/default/files/2025-01/BN_Blue%20hydrogen-%20A%20false%20hope%20for%20steel%20decarbonisation_Jan25.pdf
- Global CCS Institute: State of the Art: CCS Technologies 2025 https://www.globalccsinstitute.com/wp-content/uploads/2025/08/State-of-the-Art-CCS-Technologies-2025-Global-CCS-Institute.pdf
- RMI: Hydrogen Reality Check: Distilling Green Hydrogen’s Water Consumption https://rmi.org/hydrogen-reality-check-distilling-green-hydrogens-water-consumption/