11 Jan 2023

Explainer Series | Hydrogen 101

Posted in: Reducing emissions

Explainer Series: Hydrogen 101

Water flowing in New Zealand canal

In light of the escalating climate emergency, more renewable energy is greatly needed to replace fossil fuels. Hydrogen has often been talked about as a replacement for fossil fuels and a way to reduce greenhouse gas (GHG) emissions. As new technologies and infrastructure become available, is hydrogen an essential part of the mix to get us on the path to 1.5C warming, or will it fall short on reducing emissions?


Hydrogen is an energy carrier, meaning it can be later converted to other forms of energy. It has a very high energy density, around 2 to 4 times higher than coal, petrol and diesel, or natural gas, on a per kilogram basis. However, the energy still needs to be converted from an original energy source. The hydrogen is then gathered, and the carbon dioxide (CO2) from the process is captured and sequestered . The energy source is typically categorised as brown, grey, blue, and green hydrogen, as explained by New Zealand Hydrogen Council (see Figure 1):

  1. Brown: produced from fossil fuels. Currently more than 99 per cent of the hydrogen produced globally is produced from fossil fuels
  2. Grey: produced from industrial processes as a co-product
  3. Blue: produced from fossil fuels but with the CO2 emissions captured and stored underground (Carbon Capture and Storage)
  4. Green: produced from renewable energy sources, most commonly through electrolysis, which splits water into hydrogen and oxygen. Green hydrogen does not use fossil fuels and produces zero or very low CO2.

Other forms exist too. These include turquoise, which consists of biomass (such as recycled paper or waste from crops) gasification which releases the gasses. Purple or pink is from nuclear power, and white is from byproducts of industrial processes.

Forms of hydrogen production

Figure 1. Forms of hydrogen production. Source: New Zealand Hydrogen Council.

As noted by Reuters, the holy grail is to extract hydrogen from water using electrolysis that is powered by renewable energy (green hydrogen) for under USD $1.50 per kilogram (at the time of the article), to make it competitive with coal, oil and gas.

How is it applicable to our energy needs?

The three biggest areas of impact for clean hydrogen are “a clean heat source for industry, a clean substitute for the grey hydrogen already used in industrial processes, and heavy-duty transportation”. Hydrogen is often utilised using fuel cells, which generate electricity via an electrochemical reaction between hydrogen and oxygen, as described in the figure below:

Overview of how fuel cells work

Figure 2. Overview of how fuel cells work. Source: Fuel Cell & Hydrogen Energy Association.

The byproduct of these fuel cells is water vapor, and the cells can be refueled using liquid hydrogen. Green hydrogen can also be used as feedstock for chemicals and other products that are currently derived from fossil fuels.


Existing industries and uses of hydrogen include steel manufacturing, laboratory applications, transport, and power generation. Discourse highlights the need to use hydrogen for targeted “end uses where no alternative, and especially no more energy efficient decarbonisation options are available". Figure 3 shows a collation of potential uses, categorised from most to least desirable. The most desirable being products which are very difficult to make another way - like fertiliser and chemicals. The least desirable covers sectors which can be easily electrified instead of using hydrogen such as light vehicles, heating, and trains. Recent examples of hydrogen uses in category B include ships, and steel manufacturing (see ‘Volvo Group and fossil-free steel’).

Looking ahead to 2050, the MBIE New Zealand Hydrogen Scenarios report indicates four sectors for reducing GHG emissions; transport, energy and electricity system services, industry, and exports.

Potential uses of hydrogen ranked from most (A) to least (G) desirable.

Figure 3. Potential uses of hydrogen ranked from most (A) to least (G) desirable. Source: Liebreich Associates

Hydrogen could provide substantial emissions reductions, with a total reduction of 6 gigatonnes CO2e in the year 2050 possible (see Figure 4). To put this into context, the annual global GHG emissions in 2021 there were 52.8 gigatonnes CO2e. Annual global emissions will need to be 33 Gigatonnes CO2e or less to limit warming to 1.5 degrees, based on the UN 2022 Emissions Gap Report.

Indication on the scale of GHG emissions avoidance potential from Hydrogen use

Figure 4. Indication on the scale of GHG emissions avoidance potential from Hydrogen use. Source: Hydrogen Counsel.

What if hydrogen isn’t used directly in your business – can it still help reduce your emissions?

Hydrogen is anticipated to be applicable for certain situations. So, if the direct operation of your business is a commercial building and running a light vehicle fleet, you’re unlikely to have direct usage of hydrogen. However, where you may see impacts of hydrogen use is in your wider supply chain activities, which can be a sizeable portion of your total emissions. For example, your organisation may have significant freight related emissions. Hydrogen may become prevalent in targeted freight modes such as air, heavy road, and ocean transport. Therefore, when you calculate your total freight emissions, some segments of your freight journey may be from hydrogen powered vehicles. This will flow through to changes in your supply chain emissions profile. That’s a win for you, and the planet.

This then brings into question the provenance of how the hydrogen was produced. If the hydrogen was from a green production process, the emissions should be lower compared to fossil fuel alternatives. However, the reductions in your value chain are not just limited to transportation emissions. For example, if your value chain includes the ‘embodied’ emissions of a vehicle purchase, then low carbon steel, produced in part by hydrogen, can result in a low embodied footprint of your vehicle purchase.

The role of hydrogen in your supply chain should still be considered in the context of the mitigation hierarchy. This starts with avoiding emissions in the first place, then reduce emissions as much as possible, and as a last resort offset the residual emissions.


As noted in the MBIE New Zealand Hydrogen Scenarios report, reducing the cost of green hydrogen is the key factor affecting the increased role of hydrogen. The report indicates that national strategies and roadmaps in many developed countries expect “total demand for hydrogen of around 15-30 per cent of total energy demand in those countries or areas by 2050”.

There needs to be a move to more green hydrogen. Currently, more than 99% of the hydrogen produced globally is produced from fossil fuels. Considerations to scaling up green hydrogen production from renewable energy sources, with supporting infrastructure, will be a key component of this. Moving hydrogen around to meet the location of demand is covered extensively in the MBIE report. This includes tapping into use of existing gas pipeline infrastructure. Care will need to be taken when using existing pipelines since hydrogen is a much smaller molecule than natural gas and can leak out if precautions aren’t taken.

Hydrogen in Aotearoa

While aspects of hydrogen technologies are still in development, some are being utilised in Aotearoa New Zealand as we speak. Geothermal and wind power are being harnessed to produce green hydrogen in Taupō and Taranaki. First Gas is working on a feasibility study to determine whether their existing natural gas pipeline network could one day transport Hydrogen across the North Island. One such destination might be the Ports of Auckland, which has built a hydrogen production and refuelling facility at Waitematā port. The goal will be to refuel hydrogen fuel cell vehicles, including port equipment, Auckland Transport buses, and cars. Another may be agri-chemical plants such as Agri-Nutrients, which plans to use hydrogen to produce ammonia-urea fertilisers and power local buses, trucks, and cars in Taranaki.

Current Hydrogen Projects in Aotearoa New Zealand

Figure 5. Current Hydrogen Projects in Aotearoa New Zealand: New Zealand Hydrogen Council.


There’s a lot of potential with hydrogen. It can be used to power heavy transport, like ships and trucks, via fuel cells. It can eliminate the need for fossil fuels in high emitting industries, like forging steel and creating fertilisers. Green hydrogen is the best option in certain situations, but uncertainties remain with respect to scalability and affordability. Currently, the use of non-green hydrogen is too high for emissions reductions to be seen. However, hydrogen should be used after emissions mitigation and reduction efforts have been made. Most importantly, hydrogen use must be generated via electrolysis powered by renewable energy sources. This approach is what could make hydrogen a part of the future energy mix in a low carbon economy.


Carbon dioxide equivalenta measure used to compare the emissions from various greenhouse gases based upon their global warming potential. Numbers are calculated by converting amounts of other gases to the equivalent amount of carbon dioxide with the same global warming potential
Carbon sequestration

Storage of captured or removed atmospheric carbon (or CO2 equivalents) in environmental reservoirs

Contrast with Carbon removal and Removal

DecarbonisationMeasures that prevent the release of CO2 emissions associated with electricity, industry, and transport
Embodied emissionsThe emissions associated with a material
Greenhouse gas (GHG)Means carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, nitrogen trifluoride (NF3) and sulphur hexafluoride
MitigationIn the context of climate change, a human intervention to reduce the sources or enhance the sinks of greenhouse gases. Examples include using fossil fuels more efficiently for industrial processes or electricity generation, switching to solar energy or wind power, improving the insulation of buildings, and expanding forests and other "sinks" to remove greater amounts of carbon dioxide from the atmosphere
Renewable energy, including electricity, gas, liquid fuelsRenewable energy is energy derived from natural sources that are replenished at a higher rate than they are consumed. Sunlight and wind, for example, are such sources that are constantly being replenished. Renewable energy sources are plentiful and all around us. Fossil fuels - coal, oil and gas - on the other hand, are non-renewable resources that take hundreds of millions of years to form. Fossil fuels, when burned to produce energy, cause harmful greenhouse gas emissions, such as carbon dioxide
Supply chainA network of organisations (eg, manufacturers, wholesalers, distributors and retailers) involved in the production, delivery, and sale of a product to the consumer
Value chainAll upstream and downstream activities associated with the operations of the reporting company, including the use of sold products by consumers and the end-of-life treatment of sold products after consumer use