TABLE OF CONTENTS


This article explains how to simulate the growth of hydrogen in En-ROADS, as well as the impact of hydrogen on greenhouse gas emissions and the climate. Watch the video below for a summary.


 

What are the applications of hydrogen in energy decarbonization?

Many experts claim that hydrogen (H2) will play a major role in the clean energy transition, and a global “hydrogen economy” has gained what the IEA describes as “unprecedented political and business momentum.” With recent updates, En-ROADS allows users to explore hydrogen growth scenarios—testing the relative costs, market potential, and climate benefits of hydrogen across different sectors. 


Today, nearly all hydrogen is produced from fossil fuels and used as a feedstock in industrial processes such as ammonia production for fertilizer, oil refining, and methanol manufacturing. This gray and brown hydrogen contributes significantly to emissions. 


Looking ahead, hydrogen produced from renewable energy (green hydrogen) or other lower carbon sources is often proposed as a complement to electrification in areas where electrifying directly is difficult or expensive. These areas include: 


  • Industry - energy and feedstocks: Using green hydrogen to replace natural gas in boilers and other settings where high heat is needed or as feedstocks in chemical processes, such as separating iron from iron ore 

  • Transport: Converting hydrogen into synthetic fuels (e.g., ammonia, methanol) for aviation and shipping 

  • Buildings: Burning hydrogen in boilers for heating in residential and commercial spaces

  • Energy storage: Producing green hydrogen to store renewable electricity over long durations 


What are the types of hydrogen production simulated in En-ROADS?

Hydrogen can be produced from a range of energy sources using approaches like steam methane reforming, gasification, and electrolysis. In En-ROADS, each production pathway is assigned a specific color based on the energy source used and, as a result, has a different carbon intensity. 



Here are the types of hydrogen by production pathway or “color” included in En-ROADS:

  • Brown hydrogen is produced with coal or biomass via gasification and produces CO2 as a byproduct 

  • Gray hydrogen is produced with natural gas via steam methane (SMR) reforming and produces CO2 as a byproduct 

  • Blue hydrogen is produced from natural gas, coal, or biomass, with carbon capture and storage (CCS) to reduce emissions 

  • Yellow hydrogen is produced with electricity on the grid via electrolysis of water and results in CO2 emissions to the degree that the grid uses CO2 emitting sources 

  • Pink hydrogen is produced with dedicated nuclear electricity via electrolysis of water, resulting in no direct CO2 emissions 

  • Green hydrogen is produced with dedicated wind and solar electricity via electrolysis of water, resulting in no direct CO2 emissions. 

All of these processes involve significant losses of energy during production, which means hydrogen is a relatively inefficient and expensive energy carrier compared with the direct use of fuels or electricity. 


Note: There are other speculative sources of hydrogen, such as geological reserves of naturally occurring “white” hydrogen found under mountain ranges that are not included in En-ROADS at this time.


What is the current status of the hydrogen economy?

To see the current status of hydrogen in En-ROADS, use the Baseline Scenario and look at the graphs (both under Graphs > Final Energy Consumption—Totals): 

  1. “Hydrogen Production by Color”
  2. “Hydrogen Production by Use”


Today, there exists an already established hydrogen market of about 100 megatons (million tons) of hydrogen production and consumption. In energy terms, this is equivalent to 12 exajoules per year. At present, this hydrogen is almost entirely produced via carbon-intensive methods (see the gray and brown wedges in the left graph above) and used as an industrial feedstock (see the graph to the right above) in producing ammonia (NH3) for fertilizers, in refining (desulphurising) crude oil, and as a chemical agent in iron ore reduction. 


Note: En-ROADS requires users to introduce policies in order to simulate the growth of hydrogen in other sectors. Read below for more information. 


How to simulate future growth of the hydrogen energy market? 

En-ROADS now allows users to create scenarios in which hydrogen grows significantly as an energy carrier in industry, transport, and buildings. Users can subsidize hydrogen-fueled equipment (e.g., heating systems, machinery, ships and aircraft) across key end-use sectors: buildings, industry, and air and water transport, while simultaneously building the hydrogen fueling and delivery infrastructure to meet those demands. Sliders to encourage hydrogen deployment are under the advanced views of Electrification for Transport and for Buildings and Industry. 


Moving these sliders results in a scenario with a steadily growing hydrogen economy.


Prioritizing Green Hydrogen

To prioritize the use of green hydrogen that is produced with dedicated renewable energy, users can introduce a “Green hydrogen production subsidy” (under the advanced view of the Renewables slider). This incentivizes green hydrogen (see green wedge in left graph below) for use as an energy carrier, in feedstocks, and as a way to store wind and solar electricity (see the right graph below). When green hydrogen is subsidized, it begins to replace ways of producing hydrogen from fossil fuels. 



Note: For more detailed information on hydrogen use for storage of wind and solar energy, see the FAQs “How do I simulate hydrogen use?” and “How do I simulate energy storage for wind and solar?”.

Additional actions in En-ROADS that impact the growth of hydrogen include: 

  • Any additional policies that discourage fossil fuels (i.e., carbon price, direct tax, reducing new fossil fuel infrastructure, reducing fossil fuel utilization, etc.) 

  • Any additional slider actions that encourage renewables (i.e., direct subsidies, cost reduction breakthroughs, etc.) 

  • Introducing fuel-powered vehicle and equipment limits (found under the advanced views of Electrification for Transport and Buildings and Industry).


Note: These actions boost hydrogen growth only when combined with specific hydrogen policies, since the En-ROADS Baseline only includes hydrogen use in industrial feedstocks to reflect the current industry. 


What is the impact of hydrogen growth on emissions and the climate?

Even if green hydrogen use scales up very quickly and is used in many sectors (scenario), its overall impact on emissions reductions remains relatively limited.




There are three main reasons why hydrogen doesn't grow even more and result in more significant emission reductions: 


1. Hydrogen is costly compared to alternatives

To see the relative cost of buying and operating hydrogen-fueled equipment in En-ROADS look at the graph “Cost Ratio of Hydrogen Equipment to Alternatives” (under Graphs > Financial).


In the Baseline Scenario, the total cost of buying and operating hydrogen-powered equipment is expensive compared to the weighted average cost of equipment powered by alternatives (such as fuel or electricity) due to its relative inefficiency and immaturity as a technology. 



In a scenario with strong support for hydrogen, the average cost of buying and operating hydrogen-powered equipment is reduced, but it still remains relatively expensive. As a result, hydrogen-powered equipment remains less competitive in the market compared to alternatives like electric or conventional fuel-powered equipment.

2. Capital stock turnover causes delays

Even in scenarios where hydrogen is highly encouraged, capital stock turnover delays limit the growth of hydrogen equipment market share. 


Equipment like ships, aircraft, and industrial machinery can last for decades before it is retired. As a result, even when sales of a new type of equipment are high, there are delays until that is reflected in the share that equipment has across all existing equipment in each sector. In the graphs below, see how the green line showing hydrogen-powered sales (left) grows earlier than the green line showing hydrogen-powered equipment in operation across buildings and industry (right).


Note: For more detailed information on capital stock turnover delays throughout the model, see the En-ROADS Dynamics User Guide page.

3. Hydrogen is inefficient to produce

To produce enough green hydrogen to meet demand in a high hydrogen growth scenario requires significant renewable energy capacity. To illustrate this point, look at the “Renewables Capacity for Hydrogen Production” and “Renewables Primary Energy Demand” (both under Primary Energy Demand–Types) graphs. In this scenario, renewables demand doubles by 2060 compared to the Baseline in order to produce enough green hydrogen, and the result is 0.1°C of temperature reduction.




To put this into perspective, compare the scenario above to a scenario with similar growth in renewable energy demand by 2060. However, in this case, the renewable energy goes primarily to electricity and the result is 0.2°C of temperature reduction. The difference in temperature outcome is a result of how much additional energy is needed to produce hydrogen. In some settings, over 50% of energy is used up in the hydrogen production process. 


Future uses for hydrogen

Electric options, from EVs to electric heating systems, are cheaper and already more available than hydrogen options in many sectors. However, hydrogen helps in the hardest-to-electrify sectors, such as aviation, cargo ships, and high-heat industrial processes like iron and steel production. 


These sectors represent a small share of total energy demand: 

  • Air and water transport accounts for just 15% of total transport energy demand 
  • The hardest-to-electrify portion of industry is just 7% of total industrial energy demand (calculated from Rehfeldt et al., 2024)

In these smaller sectors, policy incentives to address the relative cost and availability of hydrogen help to avoid continued fossil fuel use and reduce emissions. 


En-ROADS helps illuminate the tradeoffs of hydrogen and highlights a key insight: no single solution will solve climate change on its own—hydrogen is no exception. 


Go into greater depth for yourself by testing a range of climate scenarios in En-ROADS or join us for our Mastering En-ROADS training series. For a complete list of the new graphs, sliders, and features added to En-ROADS with this hydrogen update, review the June 2025 En-ROADS Release Notes.