Why hydrogen colours matter

February 23 2024
By Sam Bartlett

There is a concerted campaign to stop talking about hydrogen colours and to focus only on the emissions intensity of hydrogen production. This is a mistake. The different pathways for hydrogen production, codified through different colours, have very different characteristics. Combining them all under the heading of “clean hydrogen” or “low carbon hydrogen” obscures some crucial choices and opportunity costs. We need to make smart choices about which pathways to prioritize, and colours help us to do this. 

Each year we produce and consume nearly 100 million tonnes per annum of hydrogen - mostly “brown hydrogen” made using coal and “grey hydrogen” produced from fossil gas. This is a very dirty process, accounting for 2% of global greenhouse gas emissions. If hydrogen use is to be scaled up to help us achieve net zero targets - perhaps up to 500 million tonnes each year - these production processes are not sustainable. Two leading alternatives are “green hydrogen” produced through the electrolysis of water using renewable energy and "blue hydrogen” which is grey or brown hydrogen produced using carbon capture and storage (CCS). Other colours include “pink hydrogen” which is electrolysis using nuclear power, “white hydrogen” which is naturally occurring hydrogen from the earth’s crust or mantle, “yellow hydrogen” which is electrolysis using grid electricity without constraints and “turquoise hydrogen” which produces hydrogen and solid carbon through a process called methane pyrolysis.  

We often attend meetings or conferences where at least someone argues that we should not talk about hydrogen colours. In 2023, the IEA published a report arguing that we should “move away from the use of terminologies based on colours” and instead “use the emissions intensity of hydrogen production in the development of regulation and certification schemes”. In a recent post entitled “Over the rainbow” Wood Mackenzie argue that: “As momentum builds around low-carbon hydrogen, the industry is having to look past colour labels. The future of low-carbon hydrogen hinges on governments putting in place regulations, subsidies and other incentives that are increasingly tied to the carbon intensity ‒ rather than the colour ‒ of the hydrogen produced”.  

We agree with the IEA and Wood Mackenzie on the importance of rigorous standards for measuring the carbon intensity of hydrogen production. However, most regulation and certification schemes do not use a full life cycle analysis, and many have loopholes that underestimate emissions. Research by scientists at the Environmental Defense Fund published this week argues that the most widely used lifecycle assessment frameworks fail to address three critical factors: 1) the warming effects of hydrogen emissions; 2) measured real-world methane emissions intensities; and 3) the near-term warming impacts of emissions.  

Even if these issues are comprehensively addressed, we don’t agree on “looking past” colour labels. The different pathways for hydrogen production have very different characteristics. Combining them all under the heading of “clean hydrogen” or “low carbon hydrogen” obscures some crucial choices and opportunity costs.  

Here are four reasons why hydrogen colours matter:  

1. Fossil fuel dependency. Brown, grey and blue hydrogen reinforce our dependency on fossil fuels which is what we need to move away from. Green hydrogen reduces that dependency. In countries with a large fossil fuel endowment (like Australia, Canada, Norway, the UK, the United States), the promise of blue hydrogen is being used to justify the development of new fossil fuel projects. In contrast, a growing number of countries and stakeholders are highlighting the urgent need to phase out all fossil fuel-based hydrogen in alignment with a global 1.5C pathway.  

2. Technology risk. The “no colours” narrative assumes that all production pathways are equally viable and well established. Green Hydrogen production is based on a proven technology. Scaling up the green hydrogen industry does not depend on any major technological breakthroughs, although it will benefit from research and development that will drive greater efficiencies, innovations and economies of scale. In contrast, blue hydrogen is “technically possible”, but not proven at scale, especially at the 95%+ CCS and near-zero methane leakage rate that is needed to make blue hydrogen “clean”. When considering which pathway to support, we are choosing between technologies that work and technologies that might work. Hydrogen policy should not be “technology neutral” without regard to risk. It should be based on a comprehensive and iterative process that evaluates technology readiness levels and prioritizes production pathways that are proven.  

3. Cost and subsidies. Brown, grey, blue and green hydrogen have fundamentally different economics, which has implications for government support and subsidy schemes. Let's start with brown and grey. These look like the cheapest option. But let’s not forget that we massively subsidize the fossil fuel industry. The IMF estimates global fossil fuel subsidies at $7 trillion in 2022 or 7.1 percent of global GDP. Blue will always be more expensive than brown and grey to produce and thus requires subsidies or a carbon tax in perpetuity to be viable. Achieving high rates of CCS is especially expensive. 

Why hydrogen colours matter 

To compete, the green hydrogen industry needs subsidies to get established, in particular to incentivise large scale projects that will help achieve economies of scale, including for the production of electrolysers. However, the most important cost is renewable electricity, which is already the lowest cost option for new electricity generation in most countries (see box). Renewable electricity prices are expected to fall even further.  

Eventually, green will be cheaper than blue, and then cheaper than brown and grey. The challenge is how to get to this tipping point as quickly as possible. Subsidising grey and supporting blue can "crowd out" green, delaying this inevitable transition. Many governments are prioritising the deployment of green hydrogen technology rather than doubling down on fossil fuel subsidies. 

4. Sustainability beyond emissions. Hydrogen colours are also a helpful way of pointing to the wider sustainability considerations for particular production pathways beyond their climate impacts. Grey and blue hydrogen rely on the need to extract fossil gas which is associated with water and air pollution and therefore health hazards. Safety risks for pink hydrogen using electricity from nuclear facilities is a key consideration. Green hydrogen comes with its own considerations including on water use as well as the renewable energy and electrolyser supply chains. 

In sum, anyone that says “colours don’t matter” is trying to draw your attention away from some issues of fundamental importance. When the hydrogen industry talks about a “level playing field” based on emissions measurement, they are being both insincere (given the loopholes in emission measurement standards) and neglecting important aspects of what is truly sustainable.  

We are not arguing that green hydrogen is the only solution. In some circumstances, there may be a role for blue hydrogen as a transitional solution, where blue directly replaces unabated brown or grey hydrogen production and where blue hydrogen projects have proven emissions intensities that are close to zero (including rigorous measurement of upstream methane emissions and the permanence of carbon capture). But these are the exceptions. Let us remember that blue hydrogen is expensive and not proven at scale.  

Andrew Forrest, Executive Chairman of Fortescue founder of the GH2 recently said: “If you want to drive capital… we must have clear and obvious disincentives for what is doing harm and clear incentives for what is doing good”. He’s right. We must ensure that the emissions intensity of hydrogen production trends toward zero by 2030. But we also need to consider fossil fuel dependency, technology risk, the design of smart subsidies, and make a holistic assessment of hydrogen’s contribution to the energy transition and sustainable development based on an understanding of the different colours of hydrogen.