Prioritizing demand-side applications for clean hydrogen to maximize environmental and economic benefits

Clean hydrogen will play an indispensable role in decarbonizing “hard-to-abate” sectors. However, it is not a “one-size-fits-all” solution because clean hydrogen production currently entails low energy efficiency, high costs, limited supply and risks of leakage.  U.S. policy efforts to date have focused on the supply of clean hydrogen.  However, prioritizing demand applications that maximize environmental and economic benefits is critical. Here we evaluate clean hydrogen’s decarbonization potential in a variety of energy-intensive sectors in the U.S. circa 2035.  We identify oil refining, ammonia production, and steelmaking as “no-regret” sectors, whereas on-road transport and trains fall into the “do-not-use” category. We compare the implications of policymakers GHG mitigation objectives and stakeholder profit maximizing objectives and find that current supply-side subsidies are insufficient to ensure optimal clean hydrogen allocation. Sector-specific demand-side policies are required to align priorities of policymakers and stakeholders to maximize the potential benefits of clean hydrogen.