Hydrogen could help reduce emissions from steelmaking, fertilizer production, shipping and energy storage. Its greatest potential may lie in sectors where electricity alone cannot easily replace fossil fuels.
THE UNIVERSAL RECORD
Sourced reporting. No opinions.
Brad Socha | October 14, 2026 | 5:27 AM EST
Hydrogen could become an important part of the world’s energy system, but its greatest value may have little to do with passenger cars. From producing steel and fertilizer to storing renewable electricity for extended periods, hydrogen offers ways to reduce fossil fuel dependence in activities that are difficult to electrify directly.
The central challenge is making it with fewer emissions.
Hydrogen is already widely used in industry, particularly in oil refining and ammonia production. However, most of the world’s supply is produced from natural gas or coal without capturing the resulting carbon dioxide. According to the International Energy Agency (IEA), low-emissions hydrogen accounted for only about 1% of global production in 2025.
That distinction matters. Hydrogen produces no carbon dioxide when used in a fuel cell, but its overall environmental impact depends on how it is manufactured, processed and delivered.
Unlike coal, oil or natural gas, hydrogen is primarily an energy carrier rather than an energy source. Energy must first be used to produce it.
One method, electrolysis, uses electricity to split water into hydrogen and oxygen. When powered by low-emissions electricity, the process can produce hydrogen with a relatively small carbon footprint.
Hydrogen can also be extracted from natural gas. Capturing and storing much of the associated carbon dioxide can reduce emissions, although the result depends on capture performance, methane leakage and energy use throughout production.
Once produced, hydrogen can be stored, transported, burned for heat or converted into electricity using a fuel cell. Each conversion requires energy, making hydrogen most useful where its particular capabilities outweigh those losses.
Where Hydrogen Could Make the Greatest Difference
Heavy industry presents some of hydrogen’s strongest opportunities.
Traditional steelmaking uses coal-derived coke both to generate heat and to remove oxygen from iron ore. Hydrogen can perform the chemical reduction in certain steelmaking processes, producing water instead of much of the carbon dioxide associated with conventional reduction.
Hydrogen-based direct reduced iron, combined with electric steelmaking, could substantially lower emissions when the hydrogen and electricity come from low-emissions sources. However, the technology requires major investment, suitable iron ore, reliable energy supplies and new infrastructure.
Fertilizer production offers another opportunity. Ammonia, a key ingredient in nitrogen fertilizers, is manufactured using hydrogen. Replacing fossil-derived hydrogen with low-emissions alternatives could reduce the environmental footprint of an established industrial process without requiring an entirely new market for the product.
Oil refineries also consume substantial quantities of hydrogen. Cleaner production could reduce emissions from existing operations, although it would not eliminate emissions from the petroleum products themselves.
Transport presents a more selective opportunity.
Battery-electric vehicles generally use electricity more efficiently than vehicles powered by hydrogen produced through electrolysis. For passenger cars and many urban buses, direct electrification already offers practical advantages.
Hydrogen fuel cells may nevertheless be useful for some heavy-duty vehicles operating long distances, carrying substantial loads or requiring rapid refuelling. Their competitiveness depends on fuel prices, infrastructure, vehicle performance and operational needs.
Shipping could eventually use hydrogen-derived fuels such as ammonia or synthetic methanol, although each has its own safety, production and environmental challenges.
Aviation presents an even greater technical obstacle. Hydrogen-derived synthetic aviation fuels could provide an alternative to conventional jet fuel, but producing them requires substantial quantities of low-emissions electricity and additional processing. Direct hydrogen-powered aircraft face significant storage and aircraft-design challenges.
Hydrogen’s potential therefore lies less in replacing every fuel than in addressing specific applications where alternatives remain difficult or expensive.
The Potential of Long-Term Energy Storage
One of hydrogen’s most distinctive advantages is its ability to store energy beyond the operating limits of many conventional battery systems.
Wind and solar facilities sometimes generate more electricity than the grid can immediately use. That surplus could power electrolysers, producing hydrogen for later consumption.
Stored hydrogen could then supply industrial facilities, fuel cells or electricity-generating turbines when renewable generation is insufficient.
Batteries are generally more efficient for storing electricity over shorter periods because converting electricity into hydrogen and back causes substantial energy losses. Hydrogen becomes more interesting when energy must be stored for days, weeks or potentially entire seasons.
Underground salt caverns are among the options being developed for large-scale hydrogen storage. Similar geological formations have long been used to store natural gas, although hydrogen requires its own engineering, monitoring and safety assessments.
Such systems could help electricity grids manage prolonged periods of low wind or sunlight, provided sufficient storage capacity, suitable geology and economically viable infrastructure are available.
Hydrogen fuel cells could also provide backup electricity for data centres, hospitals and remote communities. Their direct output includes electricity, heat and water, avoiding combustion-related carbon dioxide emissions at the point of use. However, their overall environmental performance still depends on hydrogen production and delivery.
Producing hydrogen domestically from renewable electricity, nuclear power or other suitable energy sources could also diversify national energy supplies and reduce exposure to imported fossil fuels. That benefit would depend on production costs, infrastructure and access to necessary equipment and materials.
Significant obstacles remain.
Hydrogen has low volumetric energy density under ordinary conditions, requiring compression, liquefaction or conversion into other substances for practical storage and transport. These processes increase costs and consume energy. Hydrogen leakage, infrastructure compatibility and safety must also be managed.
Expanding low-emissions production requires substantial investment and dependable demand. Producing hydrogen with electricity that would otherwise directly power homes, vehicles or industry can also be less efficient than using that electricity without conversion.
Hydrogen is therefore unlikely to become a universal replacement for fossil fuels. Its strongest contribution may come from complementing direct electrification rather than competing with it.
For steelmaking, fertilizer production, selected transport applications and long-duration storage, hydrogen could provide capabilities that electricity alone cannot always deliver economically or practically.
Whether those opportunities produce meaningful environmental benefits will depend on scaling low-emissions production, developing infrastructure and directing hydrogen toward the applications where it offers the greatest value.
Sources:
International Energy Agency — Global Hydrogen Review 2026: Executive Summary
https://www.iea.org/reports/global-hydrogen-review-2026/executive-summary
International Energy Agency — Global Hydrogen Review 2026: Production
https://www.iea.org/reports/global-hydrogen-review-2026/production
International Energy Agency — Global Hydrogen Review 2026: Demand
https://www.iea.org/reports/global-hydrogen-review-2026/demand
International Energy Agency — Global Hydrogen Review 2026: Trade and Infrastructure
https://www.iea.org/reports/global-hydrogen-review-2026/trade-and-infrastructure
U.S. Department of Energy — Hydrogen
https://www.energy.gov/topics/hydrogen
U.S. Department of Energy — Hydrogen Storage
https://www.hydrogen.energy.gov/program-areas/storage
Applied Energy — Underground Hydrogen Storage: A Review of Technological Developments, Challenges, and Opportunities
https://doi.org/10.1016/j.apenergy.2024.125172
About the Author
Brad Socha is the founder of The Universal Record, focused on sourced, factual global reporting. Coverage includes international news, geopolitics, technology, and major developments.