Hydrogen is the most abundant element in the universe, yet it is not found in usable quantities as a free gas. Instead, it must be extracted from compounds such as water (H₂O) or natural gas (CH₄).

Various methods are available to produce hydrogen, ranging from fossil fuel-based techniques to electricity-powered electrolysis. This guide details the major hydrogen production processes, explains their environmental relevance, and highlights how Power To Hydrogen is advancing the field with its proprietary hybrid Anion Exchange Membrane (AEM) electrolyser technology.

Why Hydrogen Production Matters

The world needs more energy, and hydrogen production offers a path forward. In 2023, global hydrogen production reached 97 million tons, but less than 1% of it was generated using low-emission technologies. Expanding clean hydrogen capacity is crucial to reducing our reliance on fossil fuels and achieving global climate goals.

Hydrogen produced using renewable electricity offers critical benefits:

  • It decarbonizes hard-to-electrify sectors such as cement and steel manufacturing.
  • It provides long-duration energy storage that complements variable wind and solar energy.
  • It enables zero-emission solutions in heavy-duty and long-haul transportation.

Governments worldwide are now investing in hydrogen infrastructure and policy frameworks. In the United States, the Department of Energy aims to reduce hydrogen costs to $1 per kilogram by 2030. In Europe, hydrogen is a cornerstone of the Fit for 55 climate targets, designed to accelerate decarbonization.

Understanding Hydrogen Color Codes

Hydrogen is commonly categorized by color labels that indicate the method of production and associated emissions:

  • Grey Hydrogen: Produced by steam methane reforming without capturing carbon dioxide. This path is mature and inexpensive, but it releases roughly 9 kg of carbon dioxide for every kilogram of hydrogen made.
  • Blue Hydrogen: Also uses SMR, but incorporates carbon capture and storage (CCS) to reduce emissions by up to 90%.‍
  • Green Hydrogen: This method eliminates carbon emissions by utilizing electricity from solar, wind, or renewable energy sources to split water into hydrogen and oxygen through electrolysis.

Other emerging color codes include turquoise hydrogen, produced through methane pyrolysis with solid carbon byproducts; pink hydrogen, generated using nuclear-powered electrolysis; and yellow hydrogen, made from grid electricity of mixed origin. Understanding this spectrum enables organizations to navigate energy policy and regulatory frameworks effectively.

Each type of hydrogen serves different purposes and investment goals, making it essential for organizations to understand these distinctions when setting emissions targets and technology roadmaps.

Hydrogen Production Methods

Hydrogen can be produced through various methods, each with distinct technical and environmental characteristics. These include conventional fossil-based techniques as well as emerging renewable-powered approaches. The most common methods are described below.

Steam Methane Reforming (SMR)

Steam methane reforming is the leading method for creating hydrogen today. In 2023, SMR supplied roughly 76 percent of the world’s hydrogen output. In this process, natural gas (primarily methane) reacts with high-temperature steam at temperatures ranging from 600 to 1,000 degrees Celsius and pressures exceeding 20 bar. The chemical reaction produces hydrogen along with carbon monoxide and carbon dioxide.

SMR infrastructure is mature and well understood in the engineering community. However, due to its significant carbon emissions, SMR is increasingly viewed as a transitional technology that requires carbon capture and storage (CCS) or replacement with cleaner alternatives like electrolysis.

Electrolysis

Electrolysis is a clean production method that uses electricity to split water into hydrogen and oxygen. When powered by renewable energy sources such as solar or wind, this method produces hydrogen with near-zero emissions. Electrolysis offers key advantages:

  • Seamless integration with intermittent renewable power
  • Modularity and scalability, from kilowatt to multi-megawatt systems
  • High-purity hydrogen output suitable for fuel cells and industry

There are four primary types of electrolysers, each suited to different operational contexts:

  1. Anion Exchange Membrane (AEM): Combines features of both PEM and alkaline systems. AEM systems use non-precious metals, tolerate variable energy inputs, and are cost-effective. Power To Hydrogen specializes in high-performance AEM electrolysers for scalable, distributed hydrogen production.
  2. Proton Exchange Membrane (PEM): Uses a solid polymer membrane and offers rapid response times. However, it relies on expensive catalysts like platinum and iridium.
  3. Alkaline Water Electrolyser: Utilizes a liquid alkaline solution (typically potassium hydroxide) with a diaphragm barrier, employing a well-established, cost-effective technology. But, it is less compatible with intermittent and fluctuating power from renewable energy sources.
  4. Solid Oxide Electrolyser (SOEC): Operates at high temperatures (600°C–1000°C), potentially increasing efficiency by using waste heat from industrial processes.

Electrolysers are central to the hydrogen transition, and ongoing research and development efforts aim to improve efficiency, durability, and cost-effectiveness across all types.

The efficiency of electrolysers is influenced by factors such as membrane conductivity, catalyst loading, and thermal management. Innovations in stack design, including pressure balancing and integrated heat exchangers, further enhance performance. Integrating electrolysis with renewable energy sources enables grid stabilization through demand response and load balancing mechanisms.

Biomass Gasification

Although still in its early stages and not yet ready for commercialization, biomass gasification converts organic matter, such as wood chips, agricultural residue, or municipal waste, into synthesis gas (syngas), a mixture of hydrogen, carbon monoxide, and carbon dioxide. In a controlled environment at 800–1,000°C, partial oxidation breaks down the feedstock.

The syngas is then purified to extract hydrogen using methods like pressure swing adsorption or membrane separation. When sourced from sustainably managed biomass or waste, this method offers a low-carbon hydrogen pathway. However, lifecycle emissions, land use, and water consumption must be carefully managed.

Methane Pyrolysis

Methane pyrolysis splits natural gas into hydrogen and solid carbon in the absence of oxygen. Operating at temperatures exceeding 1,200°C, this process can avoid CO₂ emissions if managed correctly and produce a marketable carbon by-product. The primary technical challenges include achieving high thermal efficiency and managing the collection and reuse of solid carbon. If commercialized on a large scale, methane pyrolysis could serve as an additional low emissions alternative to SMR.

Alternative and Emerging Hydrogen Production Methods

Beyond SMR and electrolysis, several other hydrogen production techniques are being developed and refined for sustainability, scalability, or niche applications. These include:

  • Photoelectrochemical (PEC) Water Splitting: Combines solar absorption and electrolysis in a single device to split water using sunlight directly.
  • Thermochemical Cycles: Use high-temperature chemical reactions, often powered by concentrated solar energy, to break down water molecules.
  • Biomass-Derived Liquid Reforming: Converts bioethanol or bio-oil into hydrogen-rich gases.
  • Solar Thermochemical Hydrogen (STCH): Uses mirrors to focus sunlight onto a reactor that drives high-temperature water-splitting reactions.
  • Photobiological Processes: Employ algae or cyanobacteria that naturally produce hydrogen under specific conditions.
  • Microbial Fermentation: Bacteria digest organic material in oxygen-free environments to generate hydrogen and organic by-products.

While these methods are in varying stages of development, each offers promise in reducing cost, emissions, or material use. Continued investment and pilot deployments will determine their future role in the hydrogen economy.

Choosing the Right Hydrogen Production Technology

Selecting the optimal hydrogen production method depends on several factors, including cost, emissions targets, local resources, and intended use. Projects must align technical feasibility with long-term strategic goals.

Capital and Operating Costs

Initial investment and ongoing operating expenses vary significantly depending on the method. Electrolysis, for instance, requires substantial electrical input but benefits from falling renewable energy prices. Organizations should compare the levelized cost of hydrogen (LCOH) projections for each method, using your local power and fuel rates, to determine which path delivers the best return over the system’s lifetime.

Carbon Emissions

Meeting environmental and corporate net-zero targets typically require a lifecycle carbon intensity of below 2 kg CO₂ per kilogram of hydrogen. Electrolysis powered by solar or wind typically meets this threshold. Fossil-based methods like SMR may only qualify if paired with highly effective carbon capture systems.

Scale and Timeline

Large industrial operations may demand hundreds of tons of hydrogen daily, while remote facilities might need only a few kilograms. Commercialized technologies like AEM electrolysis, PEM electrolysis, and SMR offer modularity and scalability to meet varying demand profiles.

Future Expansion Plans

Organizations planning to scale up should consider modular technologies and emerging methods that may offer long-term cost or efficiency benefits. Proven platforms support immediate deployment, while pilot programs may offer lower future costs but come with higher technical risk.

Infrastructure and Location

Access to infrastructure such as CO₂ pipelines, high-voltage transmission, or renewable energy sources influences technology selection. Distributed hydrogen systems, such as on-site AEM electrolysis, are ideal for remote or infrastructure-limited locations. If CO₂ pipelines or underground storage sit nearby, adding carbon capture to an SMR plant could be cost-effective

End Use Requirements

Different applications require varying hydrogen purity, pressure, and volume. Fuel cell vehicles need ultra-pure hydrogen at high pressures (350–700 bar), while industrial processes may operate at lower thresholds. Understanding end-use constraints helps optimize production design. It is also valuable to plan your system to allow for capacity expansions. Modular electrolyser stacks enable you to add more units incrementally, allowing for growth without a full system overhaul.

Local Regulatory Environment

Permitting, emissions regulations, and financial incentives vary by region. Some jurisdictions offer tax credits or fast-track approvals for hydrogen projects. Thoroughly reviewing the regulatory landscape is crucial to avoid delays or additional costs.

Applications of Hydrogen Across Industries

Hydrogen plays a growing role across numerous sectors:

  • Industrial: Used in refining, steelmaking, and chemical production. Clean hydrogen reduces the carbon intensity of ammonia and methanol synthesis.
  • Transportation: Fuel cell electric vehicles (FCEVs) power buses, trucks, trains, and ships with fast refuelling and extended range.
  • Energy Storage: Hydrogen stores surplus renewable energy and can be converted back into electricity during peak demand.
  • Power Generation: Hydrogen-powered turbines or blended gas systems provide flexible, low-emission electricity generation.
  • Remote Power and Microgrids: Enables energy independence and resilience in off-grid or disaster-prone regions.

Hydrogen’s versatility supports decarbonization, energy security, and operational resilience across the global economy.

The Future of Hydrogen Production

Hydrogen has evolved from a promising energy concept into a critical pillar of global decarbonization strategies. Governments are moving beyond research grants, and companies are investing heavily in commercial-scale deployment. Global demand is expected to increase sixfold by 2050, driven by climate policy, corporate net-zero commitments, and the need for clean energy alternatives.

Among the fastest-evolving areas is hydrogen production itself. Electrolysis powered by renewables is seeing investment across the U.S., Europe, and Asia. As more utilities build wind and solar at scale, they’re turning to hydrogen as a long-duration storage solution. Electrolysers convert surplus electricity into hydrogen, storing energy in chemical form for use when the grid requires balancing or support.

As the world moves toward net-zero targets, the importance of reliable and cost-effective hydrogen systems will only continue to grow. Power To Hydrogen is not waiting for the future; we are building it and shaping it. We are actively working with partners across the U.S. and globally to bring clean hydrogen production to communities and industries that need it most. Our AEM electrolyser technology is field-proven, commercially ready, and already deployed in large-scale pilots, research programs, and commercial energy systems.

Overcoming Challenges in Hydrogen Electrolysis

Despite the momentum behind clean hydrogen, key challenges remain that must be addressed for widespread adoption.

Cost Barriers: Electrolytic hydrogen is currently more expensive than traditional hydrogen production methods. However, advancements in electrolyser efficiency, falling renewable energy costs, and economies of scale are narrowing the gap. Power To Hydrogen’s hybrid AEM technology reduces costs by using non-precious, abundant materials without compromising performance.

Infrastructure Gaps: Hydrogen infrastructure, including pipelines, storage, and refueling stations, remains limited. However, distributed production models using compact AEM systems can bypass this bottleneck by producing hydrogen directly where it is needed, such as industrial sites or remote power hubs.

Intermittent Power Supply: Electrolysers must function reliably with variable energy inputs from solar or wind sources. Legacy systems struggle with fluctuations, but Power To Hydrogen’s AEM electrolysers are engineered for dynamic operation, ensuring consistent hydrogen production from renewable power sources.

System Lifetime and Maintenance: Durability is critical. Electrolysers degrade over time, particularly under changing loads. Power To Hydrogen’s research has focused on robust materials, improved membranes, and advanced system design to extend operational life and reduce maintenance frequency.

Why Power To Hydrogen?

Power To Hydrogen delivers cost-effective, high-efficiency AEM electrolysers that simplify hydrogen deployment. These systems use, abundant materials, operate flexibly with renewable inputs, and scale from compact units to large energy hubs.

Key Advantages:

  • Low-cost materials: No platinum, iridium, or rare earth materials
  • Modular design: Scalable from small on-site units to multi-MW systems
  • Grid integration: Flexible operation with variable power input
  • High efficiency: Converts more of your electricity into usable hydrogen

Power To Hydrogen engineers high-efficiency AEM electrolysers. Our modular systems can fit in standard shipping containers, easing transport and installation. These benefits help utilities and energy developers build viable hydrogen systems without waiting for infrastructure overhauls or new federal subsidies.

Field Results and Impact

Power To Hydrogen collaborates and partners with national research labs, the Department of Energy, NASA, Shell, and commercialization partners to improve our hydrogen production technologies. Real-world deployments have shown significant reductions in costs and operational emissions, particularly in transportation and maritime sectors.

Frequently Asked Questions (FAQs)

What is the most common hydrogen production method today?

The predominant method remains steam methane reforming (SMR), which uses natural gas and emits significant amounts of carbon dioxide. While SMR is currently the most cost-effective option, it falls short of clean energy objectives due to its carbon footprint. As a result, it is widely regarded as a transitional solution, with long-term strategies focusing on cleaner alternatives, such as renewable-powered electrolysis.

Why focus on hydrogen?

Hydrogen is essential for deep decarbonization across industries where electrification is limited. It stores energy chemically and complements renewable power, particularly for seasonal storage and heavy transport. Today, most hydrogen is still derived from fossil fuels. Advancing cleaner production methods, especially electrolysis powered by renewables, is essential for reducing global emissions. This is no longer hypothetical: governments are funding real-world projects, companies are scaling up deployment, and entire industries (from steelmaking to shipping) are integrating hydrogen energy systems.

What is the cost difference between green and grey hydrogen?

Grey hydrogen, derived from natural gas, typically costs $1–2 per kilogram, depending on regional gas prices. Green hydrogen, produced via electrolysis using renewable electricity, is currently more expensive at $2–5 per kilogram. However, costs are declining rapidly due to falling renewable energy prices and improved electrolyser efficiency. Power To Hydrogen’s advanced AEM technology helps lower both capital and operational costs, accelerating the path to cost parity.

How does AEM differ from PEM?

Anion Exchange Membrane (AEM) electrolysers combine the benefits of Proton Exchange Membrane (PEM) and alkaline systems, but without relying on expensive materials like platinum or iridium. AEM systems utilize affordable, abundant materials and are designed to operate efficiently with variable energy inputs, making them ideal for integration with solar and wind power.

Can hydrogen be used for long-duration energy storage?

Yes. Hydrogen produced by electrolysis can be stored for days, weeks, or even months. It can be converted to electricity through fuel cells or electrolysis when needed. This makes it one of the most promising options for seasonal or long-duration energy storage, particularly in renewable-dependent systems.

What limits the scale-up of hydrogen production?

The primary constraints include high capital costs, limited access to low-cost renewable power, and supply chain bottlenecks for critical components such as membranes and catalysts. Overcoming these barriers requires continued investment, innovation, and supportive policy frameworks.

Work With Us to Advance the Hydrogen Economy

Whether you're powering an industrial furnace, managing a vehicle fleet, or building a microgrid, clean hydrogen can help reduce emissions while lowering long term operational costs. Power To Hydrogen offers plug-and-play hybrid AEM electrolysers, precision system modeling, and dedicated technical support.

Contact us today to launch your hydrogen project or request a live demonstration of our technology. Let’s build the clean fuel supply that the future demands. Ready for detailed insights? Our engineering team can provide a custom yield and payback model tailored to your site’s energy profile.