The Role of Hydrogen in Next-Generation Industrial Decarbonization

As the world races to combat climate change and achieve net-zero emissions, decarbonizing industrial sectors remains one of the greatest challenges. Heavy industries such as steel, cement, chemicals, and refining are responsible for nearly 30% of global CO₂ emissions due to their reliance on fossil fuels. While renewable electricity and carbon capture technologies play critical roles in emission reductions, hydrogen has emerged as a game-changing solution for deep industrial decarbonization.

But how exactly can hydrogen help industries transition to a low-carbon future? And what are the technological, economic, and policy challenges that must be addressed for widespread adoption? This article explores the role of hydrogen in next-generation industrial decarbonization, its production methods, applications in key industries, and the roadmap to scaling hydrogen as a viable climate solution.

Hydrogen as a Clean Energy Carrier

What Makes Hydrogen a Key Decarbonization Solution?

Hydrogen is a versatile energy carrier that can be used to store, transport, and deliver energy without emitting CO₂ when used as a fuel. Unlike fossil fuels, hydrogen combustion only produces water vapour, making it a promising alternative for high-emission industrial processes.

The key advantages of hydrogen in decarbonization include:

✅ Zero or Low Emissions: When produced from renewables (green hydrogen), hydrogen can be completely carbon-free.

✅ High Energy Density: Hydrogen has a high energy-to-weight ratio, making it suitable for energy-intensive industrial applications.

✅ Fuel Flexibility: Hydrogen can replace coal, oil, and natural gas in multiple industrial processes.

✅ Sector Coupling: Hydrogen can integrate with electricity grids, transportation, and chemical industries to create a circular, low-carbon economy.

Types of Hydrogen and Their Carbon Footprints

Not all hydrogen is created equal. Hydrogen production methods vary widely in their carbon intensity:

For hydrogen to be a truly sustainable solution, the transition from gray to green hydrogen is essential. However, this shift requires overcoming economic and infrastructure barriers.

Hydrogen’s Role in Key Industrial Sectors

1. Hydrogen in Steel Manufacturing

Steel production is one of the most carbon-intensive industries, accounting for nearly 8% of global CO₂ emissions. The primary reason is the use of coal in blast furnaces to extract iron from iron ore.

🔹 Hydrogen-Based Direct Reduced Iron (H2-DRI):

• Instead of coal, hydrogen can be used to reduce iron ore, producing water vapour instead of CO₂.

• Companies like SSAB, ArcelorMittal, and Thyssenkrupp are developing hydrogen-based steelmaking plants.

• If powered by green hydrogen, this method could eliminate over 90% of steel emissions.

  
  

🔹 Challenges & Roadblocks:

• Hydrogen production costs remain high compared to coal.

• Large-scale hydrogen infrastructure is still in early development.

• Policy incentives are needed to make hydrogen-based steel competitive.

2. Hydrogen in Cement Production

Cement manufacturing is another hard-to-abate industry, responsible for 7% of global CO₂ emissions.

Most emissions arise from:

• Burning fossil fuels to heat kilns.

• Chemical reactions (limestone decomposition) release CO₂.

  
  

💡 How Hydrogen Can Help:

1. Hydrogen can replace fossil fuels for high-temperature heating (>1400°C).

2. When combined with carbon capture and utilization (CCU), it can create carbon-neutral cement.

3. Trials by Hanson, Cemex, and HeidelbergCement are exploring hydrogen-powered kilns.

   
   

🔹 Challenges:

• Green hydrogen needs low-cost renewable electricity to be viable.

• Modifications to cement plant designs are required.

  
  

3. Hydrogen in Chemical & Refining Industries

The chemical industry relies heavily on hydrogen to produce ammonia, methanol, and synthetic fuels.

However, most of this hydrogen is gray hydrogen, leading to significant emissions.

🌱 Green Hydrogen for Chemicals & Fuels:

• Ammonia Production: Green hydrogen can replace fossil fuels to make carbon-free ammonia, useful for fertilizers and hydrogen storage.

• Methanol & Synthetic Fuels: Hydrogen can react with CO₂ to create e-fuels, reducing dependency on petroleum-based fuels.

• Oil Refining: Hydrogen is used in hydrocracking and desulfurization processes. Replacing gray hydrogen with green hydrogen can decarbonize refineries.

  
  

🔹 Challenges:

• Green hydrogen costs 3-5x higher than gray hydrogen today.

• Significant investment is needed for retrofitting chemical plants.

  
  

4. Hydrogen for High-Temperature Industrial Heat

Many industries require extreme heat (>1000°C), which is difficult to electrify.

Hydrogen can replace natural gas in industries like:

🔥 Glass Manufacturing

🔥 Ceramics & Tiles

🔥 Food Processing

Several industrial hubs, including the UK’s HyNet project, are developing hydrogen-based heating systems to phase out natural gas.

Challenges in Scaling Hydrogen for Industrial Use

Despite its promise, hydrogen adoption faces major hurdles:

1. High Production Costs

• Green hydrogen costs $4-6 per kg, while gray hydrogen costs $1-2 per kg.

• Electrolyzer technology needs to become cheaper and more efficient.

  
  

2. Infrastructure Gaps

• Hydrogen pipelines, storage, and refuelling stations are limited.

• Retrofitting industrial plants requires billions in investment.

3. Energy Requirements

• Producing green hydrogen requires massive amounts of renewable electricity.

• Scaling hydrogen will require a global expansion of wind, solar, and hydropower.

4. Policy & Market Uncertainty

Governments need strong hydrogen policies, including:

✅ Carbon pricing on fossil fuels

✅ Hydrogen subsidies & tax incentives

✅ R&D investments in hydrogen technology

The Future of Hydrogen in Industrial Decarbonization

To accelerate hydrogen adoption, we need:

📌 Cost Reductions: Investment in large-scale electrolysis and renewable energy.

📌 Infrastructure Development: Hydrogen pipelines, storage, and industrial integration.

📌 Policy Support: Stronger government commitments to green hydrogen.

📌 Corporate Action: Steel, cement, and chemical companies investing in hydrogen technologies.

Major economies like the EU, the US, China, and Japan are scaling up hydrogen strategies, with billions in funding for green hydrogen projects. If successful, hydrogen could cut industrial emissions by over 60% by 2050.

Conclusion: Hydrogen as the Key to Industrial Decarbonization

Hydrogen holds enormous potential for decarbonizing hard-to-abate industries. While challenges remain in costs, infrastructure, and policy, technological advancements and government support can make hydrogen a central pillar of the clean energy transition.

For industries that cannot be electrified, hydrogen provides the missing piece of the net-zero puzzle—helping transform steel, cement, chemicals, and refining into sustainable, low-carbon industries.

The question is no longer IF hydrogen will play a role in decarbonization, but HOW FAST we can scale it to meet our climate goals?