Over the past 150 years, we have treated the planet as an endless resource, burning fossil fuels laid down over hundreds of millions of years in a matter of centuries. As we pivot to hydrogen-based processes, we must recognise that we cannot demand instant parity with technologies refined over generations. In a recent conversation with Jens Wulff and Frank Buschmann of Neuman & Esser, two experts in hydrogen compression and infrastructure, we explored the unique challenges of hydrogen, the sectors leading adoption, the price thresholds for industrial uptake, and the policy catalysts needed to accelerate the energy transition.
WATCH THE FULL INTERVIEW HERE
Molecular Weight Matters
Hydrogen’s molecular weight of just 2.0 contrasts sharply with natural gas at 16.5. This difference forces compressor designers to provide greater piston-to-seal distances and specialized materials to prevent hydrogen from leaking or embrittling metals. This isn’t a minor tweak but a fundamental redesign that comes at a higher initial cost and complexity.
Ensuring Reliable and Affordable Supply
Industrial customers demand long-term contracts guaranteeing delivery at predictable prices and availability. The shocks of 2022, when gas prices spiked following the crisis in Ukraine, demonstrated how volatile feedstock costs can halt entire refineries and even disrupt related sectors like food processing. Initiatives such as the H2Global Foundation propose ten-year price guarantees for producers and offtakers, with governments backstopping the difference to provide the security industries need to invest.
Industrial Adoption Trends
Globally, hydrogen uptake began in mobility, but momentum is now shifting to industry. Inquiries are pouring in from green ammonia projects, refineries seeking net-zero pathways, and steel manufacturers testing green hydrogen as a reduction agent. While mobility faces challenges of range and infrastructure, industrial applications can leverage existing sites and expertise to scale faster.
Barriers to Green Steel and Other Sectors
The steel industry’s processes have been honed for 150 years around coke reduction. Early green hydrogen blast furnaces must prove they match steel quality and throughput. Test beds, such as a cutlery plant in Brazil, are critical to learning and optimisation. We can’t expect a plug-and-play swap of hydrogen for coke overnight, but we must invest in pilot projects that gradually close the performance gap.
Compression Design Challenges
Compressing hydrogen to pressures of 200 bar or more has been done in refineries and fuel stations for decades, but every additional bar adds cost. The embrittlement risk and leak potential of hydrogen require doubling the clearance in pistons and using advanced materials. There is a balance to strike between capital cost and operational safety.
Pricing Dynamics and the H₂ Price Point
Today, grey hydrogen costs around €1.50–2.00 per kilogram, excluding the CO₂ certificates that currently trade at €80–100 per ton but are set to rise 2.7% annually, likely reaching €200–300 per ton. Since producing one kilogram of hydrogen emits over ten kilograms of CO₂, certificate costs could add €3 per kilogram of hydrogen. Green hydrogen from electrolysis needs 50–60 kWh per kilogram; at electricity prices of €0.03–0.04 per kWh, levelised costs can fall to €3–3.50 per kilogram. Hitting this threshold will unlock widespread industrial adoption.
Policy and Financing Models
Beyond carbon pricing, targeted subsidies can catalyse markets. Germany’s 1990s 100,000-roof photovoltaics incentive created a social proof effect that rapidly scaled solar deployment. For hydrogen, we must focus subsidies on projects with real scale potential, avoiding small-scale pilots that duplicate existing research. Regulatory certainty under RED II/III for renewable hydrogen is essential, but Europe must balance climate goals with maintaining a robust domestic refinery and chemicals industry.
Future Outlook to 2030
By 2030, the petrochemical sector will be transformed most dramatically, with green ammonia and green iron plants coming online in regions with abundant solar and wind resources—from northern Africa and the Atacama Desert to parts of the US and Australia. Heavy-duty transport will follow, especially in long-haul trucking and bus fleets. History shows that energy-intensive industries cluster where cheap energy is available; the same principle will drive the next industrial revolution in hydrogen.
