Factsheet – Hydrogen

The document analyzes hydrogen production methods, contrasting the high carbon intensity of fossil fuel-based routes—even those using carbon capture (CCUS)—with the lower impact of water-based electrolysis. It highlights a significant gap between current electrolyser manufacturing capacity and the targets required for the IEA's Net Zero Emissions by 2050 scenario. Reclaim Finance argues that financial support should be restricted to electrolytic hydrogen and prioritized for hard-to-abate sectors like ironmaking and shipping, rather than power storage or heating.

• Most hydrogen is currently produced via carbon-intensive fossil fuel processes, with 'low-carbon hydrogen' accounting for less than 1% of production. The IEA's Net Zero Emissions (NZE) scenario projects production will grow from 94 Mt in 2021 to 180 Mt by 2030, with two-thirds of this growth coming from water-based electrolysis and one-third from fossil fuels with CCUS.
• Hydrogen production from fossil fuels with CCUS is criticized for inefficiency and leakage. A 60% CO2 capture rate provides almost no climate benefit, and if methane leakage along the gas value chain is 3.5%, the process can be more polluting than burning fossil gas without CCUS. A case study of Shell’s Quest plant showed a CO2 capture rate of only 48% in 2021.
• There is a substantial gap in electrolyser capacity needed to meet NZE targets. While the project pipeline grew to 134 GW by 2022, the NZE requires 720 GW to 850 GW. Without additional manufacturing capacity, production is expected to be capped around 300 GW by 2030, as manufacturing capacity was only 30 GW per year at the end of 2022.
• Hydrogen's utility in the energy transition is highest for ironmaking (via Direct Reduction of Iron) and shipping (via ammonia), and high for heavy road transport, but only 'moderate' for the power sector because alternative solutions for power and heat are easier to implement.

APA

Reclaim Finance (2023). Factsheet – Hydrogen. https://reclaimfinance.org/site/wp-content/uploads/2023/12/FACTSHEET-Hydrogen.pdf

Chicago

Reclaim Finance. Factsheet – Hydrogen. 2023. https://reclaimfinance.org/site/wp-content/uploads/2023/12/FACTSHEET-Hydrogen.pdf.

Wikipedia

{{cite report |author=Reclaim Finance |title=Factsheet – Hydrogen |date=December 2023 |url=https://reclaimfinance.org/site/wp-content/uploads/2023/12/FACTSHEET-Hydrogen.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{reclaimfinance2023factsheet, author = {{Reclaim Finance}}, title = {{Factsheet – Hydrogen}}, institution = {Reclaim Finance}, year = {2023}, month = dec, url = {https://reclaimfinance.org/site/wp-content/uploads/2023/12/FACTSHEET-Hydrogen.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }