REGULATING HYDROGEN

The report outlines the regulatory complexities of the energy transition toward low-emissions hydrogen, emphasizing the high uncertainty of future demand. It provides specific guidance for electricity and gas regulators on managing infrastructure investments, pricing, and safety risks. The authors argue that regulators must balance government policy goals with their mandate to ensure affordable and safe service, warning against 'stranded assets' if hydrogen investments are based on hype rather than economic reality. Key technical concerns include hydrogen's propensity for pipeline embrittlement, low roundtrip efficiency in power generation, and the necessity of high-integrity emissions accounting to avoid greenwashing.

• There is significant uncertainty regarding future low-emissions hydrogen demand, as evidenced by the IEA's 2050 NZE Scenario forecast falling by nearly a quarter between 2021 and 2024 to 401 million metric tons (MMT).
• Hydrogen blending in existing natural gas networks for building heat is generally viewed as non-viable compared to electrification or thermal energy networks, with some regulators in Massachusetts and Colorado concluding it is unlikely to be a primary fuel source for home heating.
• Hydrogen poses unique safety risks compared to methane, including the ability to 'embrittle' metal pipelines and a faster flame speed that can travel back through pipes to damage equipment.
• To prevent greenwashing and ensure actual emissions reductions, the report advocates for 'three pillars' emissions accounting—requiring new, deliverable, hourly-matched clean electricity—to avoid inducing fossil fuel power generation on the grid.
• While the total global water requirement for hydrogen production is small (less than 0.25% of freshwater resources), local water stress is a critical risk, particularly in regions where hydrogen is produced for export.
• Hydrogen combustion typically increases nitrogen oxide (NOx) emissions compared to methane, which may conflict with local air quality and public health standards.
• Regulators are cautioned against approving 'hydrogen-ready' combustion turbines without clear seasonal storage use-cases, as these risk becoming stranded assets if cost-competitive low-emissions fuel does not materialize.

APA

Esposito, D., & O’Boyle, M. (2025). REGULATING HYDROGEN. Energy Innovation. https://energyinnovation.org/wp-content/uploads/Regulating-Hydrogen.pdf

Chicago

Esposito, Dan, and Mike O’Boyle. REGULATING HYDROGEN. Energy Innovation, 2025. https://energyinnovation.org/wp-content/uploads/Regulating-Hydrogen.pdf.

Wikipedia

{{cite report |last1=Esposito |first1=Dan |last2=O’Boyle |first2=Mike |title=REGULATING HYDROGEN |publisher=Energy Innovation |date=June 2025 |url=https://energyinnovation.org/wp-content/uploads/Regulating-Hydrogen.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{esposito2025regulating, author = {Esposito, Dan and O’Boyle, Mike}, title = {{REGULATING HYDROGEN}}, institution = {Energy Innovation}, year = {2025}, month = jun, url = {https://energyinnovation.org/wp-content/uploads/Regulating-Hydrogen.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }