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Hydrogen Ladder

The Hydrogen Ladder

Clean hydrogen is essential to limit global warming to below 2°C. Despite the influx of funding, widespread adoption is difficult due to the limited availability of green electricity. Michael Liebreich suggests prioritizing applications via his Hydrogen Ladder framework. In this blog post we explore its implications.

Clean hydro­gen is seen by most people famil­i­ar with the sub­ject, from experts to politi­cians, as a cru­cial tool to stop glob­al warm­ing before it exceeds 2 °C. That’s why gov­ern­ments and investors are throw­ing money at almost any pro­ject that uses clean hydro­gen. This is tempt­ing many to try to strike gold with clean hydro­gen pro­jects; ini­ti­at­ives, pro­jects and large-scale plants are spring­ing up like mush­rooms in a wide range of applications.

But, says Michael Liebreich, a prom­in­ent fig­ure in the clean hydro­gen dis­course, there will not be enough green energy to pro­duce clean hydro­gen for all applications.

He there­fore wants to steer stake­hold­ers away from fuel cell cars and oth­er applic­a­tions where bat­ter­ies are a viable altern­at­ive to fer­til­izers and oth­er selec­ted applic­a­tions where clean hydro­gen can be more bene­fi­cial. To illus­trate which areas of applic­a­tion investors and politi­cians should or should not invest in, he has cre­ated a frame­work named the Hydro­gen Lad­der.

Let’s delve deep­er into the intric­a­cies of the Hydro­gen Lad­der to bet­ter under­stand its implic­a­tions for the clean hydro­gen land­scape.


There is not enough green elec­tri­city that can be con­ver­ted into clean hydro­gen to sup­ply all pos­sible applic­a­tions of hydro­gen, says Michael Liebreich.

Of course it’s not enough today, says the optim­ist. This is because less than 1 per­cent of all hydro­gen pro­duced 2023 is clean. We will rem­edy this by build­ing a heck of a lot of PEM elec­tro­lyz­ers all over the world.

But even then, insists Michael Liebreich, we will not be able to pro­duce enough hydrogen.

It feels like Michael Liebreich is a party crash­er. Here we have the party of a life­time to cel­eb­rate the great future of clean hydro­gen. We are drink­ing bub­bly and in a great mood. Optim­ism is high; we are invin­cible. Then he comes here and trashes everything. Who does he think he is?

Michael Liebreich

Michael Liebreich is a Lon­don­er and an Olympi­an. But it’s not in these qual­it­ies that he hangs out in the hydro­gen space. He is known for his deep under­stand­ing of how energy mar­kets work, includ­ing clean energy and its impact on the envir­on­ment. Expert­ise that builds on his exper­i­ence as a con­sult­ant at McKin­sey, ven­ture cap­it­al­ist at Groupe Arnault, and espe­cially as founder of Bloomberg New Energy Fin­ance, a lead­ing source of insights on clean energy, trans­port­a­tion and tech­no­logy. Today he runs his own con­sult­ing business.

It is worth not­ing that Michael Liebreich is not anti-hydro­gen. On the con­trary! He is also excited about the future of hydro­gen. After all, that’s why he’s at the same party as us. But unlike the party prizes, he has only sipped his bub­bly. He is simply the sober one among us. Maybe we should listen to what he has to say about clean hydrogen.

Short interruption for important message

Dear share­hold­ers and investors,

You may won­der why I have dragged you to this party. Of course, you have noth­ing against hydro­gen, and are as keen as any­one to reduce green­house gas emis­sions. But you are primar­ily inter­ested in see­ing Smol­tek’s shares increase in value.

Of course you know why I’ve invited you to the party: Smol­tek devel­ops car­bon nan­ofibers that can be used for a lot of good things. For a start, we have focused on two busi­ness areas: Smol­tek Semi and Smol­tek Hydro­gen. The lat­ter has developed a unique cell mater­i­al for PEM elec­tro­lyz­ers; it can sig­ni­fic­antly reduce the amount of the neces­sary but ridicu­lously expens­ive cata­lyst met­al iridi­um. This will save gigant­ic amounts of money for elec­tro­lyz­er man­u­fac­tur­ers and, by exten­sion, all their customers.

Their cus­tom­ers? Yes, all the ones you see here at the party. They all need PEM elec­tro­lyz­ers. And all will want to save big by choos­ing elec­tro­lyz­ers with Smol­tek cell mater­i­al. You see?

This makes Smol­tek such a damn good invest­ment. Both cha-ching and social bene­fit at the same time.


(I’ve said it before, there’s always a but in every good story).

The rub is that there won’t be enough PEM elec­tro­lyz­ers and green elec­tri­city for every­one at the party. At least that’s the mes­sage Michael Liebreich is try­ing to get across to every­one at the party.

But no one wants to listen to him. Every­one is pre­oc­cu­pied with boast­ing about their anti­cip­ated suc­cess to their peers instead of pay­ing atten­tion to Liebreich’s warnings.

But we have listened and will now explain what Michael Liebreich is try­ing to say.

Hydrogen Ladder

The Hydro­gen Lad­der looks like the European Uni­on energy label. (You know that col­or­ful stick­er on white goods, light bulb pack­aging and cars you buy that shows how energy effi­cient it is on a scale from A to G – from best to worst).

How­ever, instead of grad­ing the energy effi­ciency of white goods, light bulbs and cars, Michael Liebreich uses the same col­or and let­ter scale to grade the like­li­hood that hydro­gen will be dir­ectly or indir­ectly used on a large scale by an applic­a­tion a dec­ade from now.

Why a decade?

Right now the gov­ern­ment is throw­ing money at all clean hydro­gen applic­a­tions. Any­one with ideas for how clean hydro­gen can be used is run­ning after this money.

In ten years, when the sub­sidies start to dry up and the tough com­mer­cial con­di­tions kick in, the wheat will be sep­ar­ated from the chaff. In the mean­time, the tech­no­logy will be fine-tuned and the neces­sary infra­struc­ture will emerge.

So in ten years – give or take a few years – we will see which applic­a­tions can really stand on their own.

While we wait for the ver­dict, we can spec­u­late on what will work and what won’t. This is what Michael Liebreich does with his Hydro­gen Ladder.

What the Hydrogen Ladder is and isn’t

It is import­ant to under­stand that the Hydro­gen Lad­der is only a clas­si­fic­a­tion based on Michael Liebreich’s assess­ment of the like­li­hood of a clean hydro­gen applic­a­tion being com­mer­cially viable at scale around 2035.

In his assess­ment, Michael Liebreich has weighed

  • sci­entif­ic factors such as ther­mo­dy­nam­ics, phys­ics, and chemistry,
  • eco­nom­ic factors such as cost, crit­ic­al min­er­al avail­ab­il­ity, and co-bene­fits, and
  • envir­on­ment­al factors such as air pol­lu­tion, geo­pol­it­ics, and human behavior.

The mod­el is about noth­ing else. It is not an assess­ment of energy effi­ciency. It is not an assess­ment of the speed of the trans­ition to hydro­gen. It is not an assess­ment of mar­ket size. It is not an assess­ment of how much car­bon diox­ide the atmo­sphere can be saved from.

That said, we are now ready to look at Michael Liebreich’s rank­ing of 35 can­did­ates for clean hydro­gen use.

No alternative

Rung A sig­ni­fies use cases where hydro­gen is the only option, with no altern­at­ive energy car­ri­ers or pro­cesses avail­able. These applic­a­tions may not neces­sar­ily be grow­ing mar­kets, but hydro­gen­’s role is indis­pens­able due to its unique prop­er­ties or require­ments of the process.

Hydro­gen Lad­der lists fol­low­ing applic­a­tion areas in this category:

  • Fer­til­izer: Hydro­gen is crit­ic­al for pro­du­cing ammo­nia, a key ingredi­ent in fer­til­izers, through the Haber-Bosch process.
  • Hydro­gen­a­tion: Essen­tial in pro­cessing fats and oils, hydro­gen­a­tion con­verts unsat­ur­ated fats to sat­ur­ated fats by adding hydrogen.
  • Meth­an­ol: Hydro­gen is used to pro­duce meth­an­ol, a fun­da­ment­al build­ing block in the pro­duc­tion of vari­ous chem­ic­als and fuels.
  • Hydro­crack­ing: In refin­ing, hydro­gen is used to break down heavy crude oil frac­tions into light­er, more valu­able products.
  • Des­ul­phur­isa­tion: Hydro­gen plays a cru­cial role in remov­ing sul­fur from fossil fuels, redu­cing pol­lu­tion from their combustion.

Decent market share

Rung B iden­ti­fies areas where hydro­gen has a strong chance of cap­tur­ing a sig­ni­fic­ant mar­ket share. This is due to advant­ages it offers over oth­er energy car­ri­ers in terms of cost, safety, con­veni­ence, or oth­er factors.

Hydro­gen Lad­der lists fol­low­ing applic­a­tion areas in this category:

  • Ship­ping: Hydro­gen serves as a clean energy source when used as clean ammo­nia or e‑methanol, redu­cing emis­sions in mar­ine transport.
  • Jet avi­ation: As e‑fuel, hydro­gen provides a sus­tain­able altern­at­ive to con­ven­tion­al jet fuels, prom­ising lower car­bon emissions.
  • Chem­ic­al feed­stock: Hydro­gen is pivotal in syn­thes­iz­ing a wide range of chem­ic­als, sup­port­ing vari­ous indus­tri­al processes.
  • Steel: Employ­ing hydro­gen as a redu­cing agent in steel­mak­ing pro­cesses reduces car­bon emis­sions, mak­ing pro­duc­tion greener.
  • Long dur­a­tion grid bal­an­cing: Hydro­gen can be stored and con­ver­ted back to elec­tri­city, offer­ing a solu­tion for bal­an­cing energy sup­ply and demand over exten­ded periods.

Some market share

Rung C sug­gests that hydro­gen will likely cap­ture some mar­ket share, though not dom­in­antly. This could be in sec­tors where hydro­gen com­petes with oth­er clean tech­no­lo­gies or where its adop­tion is driv­en by spe­cif­ic loc­al advant­ages, such as avail­ab­il­ity of renew­able resources or infra­struc­ture readiness.

Hydro­gen Lad­der lists fol­low­ing applic­a­tion areas in this category:

  • Coastal and river ves­sels: Hydro­gen offers a clean­er fuel altern­at­ive, redu­cing emis­sions for mar­ine ves­sels in sens­it­ive ecosystems.
  • Non-road mobile machinery: In con­struc­tion and agri­cul­ture, hydro­gen-powered machinery can reduce car­bon foot­print and noise pollution.
  • Vin­tage and muscle cars: As e‑fuel, hydro­gen provides a sus­tain­able path to keep these cars run­ning without tra­di­tion­al gasoline.
  • Bio­gas upgrad­ing: Hydro­gen can enhance the qual­ity of bio­gas, increas­ing its energy con­tent and mak­ing it a more effect­ive fuel source.

Small market share

Rung D implies that hydro­gen could plaus­ibly secure a small slice of the mar­ket. These are areas where hydro­gen­’s use is feas­ible but faces strong com­pet­i­tion from oth­er tech­no­lo­gies or where its advant­ages are not as pronounced.

Hydro­gen Lad­der lists fol­low­ing applic­a­tion areas in this category:

  • Long dis­tance trucks and coaches: Hydro­gen may offer a viable altern­at­ive for long-haul trans­port, where bat­tery weight and char­ging times are lim­it­ing factors.
  • High-tem­per­at­ure indus­tri­al heat: In indus­tries requir­ing high tem­per­at­ures, hydro­gen can provide a clean source of heat.
  • Gen­er­at­ors: Hydro­gen-fueled gen­er­at­ors can serve as a clean backup power source, espe­cially in remote or sens­it­ive locations.

Niche market share

Rung E envi­sions scen­ari­os where hydro­gen could find a foothold in niche mar­kets. These are applic­a­tions where hydro­gen offers unique bene­fits to small, spe­cial­ized sec­tors, pos­sibly driv­en by spe­cif­ic tech­no­lo­gic­al, safety, or envir­on­ment­al considerations.

Hydro­gen Lad­der lists fol­low­ing applic­a­tion areas in this category:

  • Region­al trucks: Hydro­gen could serve spe­cial­ized trans­port needs where elec­tric altern­at­ives are not viable.
  • Com­mer­cial heat­ing: As part of a hybrid sys­tem, hydro­gen can sup­ple­ment heat­ing solu­tions, redu­cing car­bon emissions.
  • Island grids: Hydro­gen can offer a resi­li­ent and sus­tain­able energy solu­tion for remote island communities.
  • Short dur­a­tion grid bal­an­cing: For man­aging short-term fluc­tu­ations in the elec­tri­city grid, hydro­gen can play a cru­cial role.

Niche market share in some geographies

Rung F high­lights the poten­tial for hydro­gen to cap­ture niche mar­ket shares in spe­cif­ic geo­graph­ies. This reflects the influ­ence of loc­al factors—such as the avail­ab­il­ity of renew­able energy sources for hydro­gen pro­duc­tion, loc­al policy sup­port, or spe­cif­ic envir­on­ment­al or logist­ic­al challenges—that might make hydro­gen an attract­ive option in cer­tain regions but not universally.

Hydro­gen Lad­der lists fol­low­ing applic­a­tion areas in this category:

  • Light avi­ation: In remote areas, hydro­gen-powered avi­ation could offer a clean­er altern­at­ive to con­ven­tion­al fuels.
  • Remote and rur­al trains: Where elec­tri­fic­a­tion is not feas­ible, hydro­gen trains can reduce emis­sions and reli­ance on diesel.
  • Loc­al fer­ries: For short sea routes, hydro­gen fer­ries can offer a sus­tain­able trans­port­a­tion solution.
  • Light trucks: In spe­cif­ic regions, hydro­gen light trucks could meet deliv­ery needs with lower emissions.
  • Bulk power imports: Hydro­gen could facil­it­ate the import of renew­able energy across borders.
  • UPS: Unin­ter­rupt­ible Power Sup­plies (UPS) powered by hydro­gen can provide reli­able backup power in crit­ic­al applications.

Row of doom

Finally, rung G rep­res­ents use cases where hydro­gen­’s pro­spects are the most chal­len­ging. These are scen­ari­os where the com­bin­a­tion of tech­nic­al, eco­nom­ic, and prac­tic­al bar­ri­ers makes the wide­spread adop­tion of hydro­gen unlikely or where its use is out­per­formed by oth­er altern­at­ives across most or all con­sid­er­a­tions. This could reflect situ­ations where the energy required to pro­duce, trans­port, and use hydro­gen out­weighs its bene­fits, or where oth­er solu­tions are more effi­cient, cost-effect­ive, or practical.

Hydro­gen Lad­der lists fol­low­ing applic­a­tion areas in this category:

  • Metro trains and buses: In urb­an set­tings, elec­tric altern­at­ives are typ­ic­ally more effi­cient and cost-effective.
  • Urb­an deliv­ery and tax­is: Elec­tric vehicles offer a more prac­tic­al and eco­nom­ic­al solu­tion for urb­an deliv­ery and taxi services.
  • 2 and 3‑wheelers: Elec­tric bikes and scoot­ers are more viable due to their lower energy require­ments and sim­pler infrastructure.
  • Cars: Bat­tery elec­tric vehicles (BEVs) provide a more dir­ect and effi­cient use of elec­tri­city for per­son­al transportation.
  • Bulk e‑fuels: Pro­du­cing e‑fuels on a large scale is energy-intens­ive and less effi­cient com­pared to dir­ect electrification.
  • Mid/low-tem­per­at­ure indus­tri­al heat: Elec­tric heat­ing solu­tions are gen­er­ally more effi­cient for these applications.
  • Domest­ic heat­ing: Elec­tric heat pumps offer a more effi­cient and sus­tain­able option for res­id­en­tial heating.
  • Power gen­er­a­tion using non-stored hydro­gen: Dir­ect use of renew­able elec­tri­city is more effi­cient than con­vert­ing it to hydro­gen for power generation.

Hydrogen Ladder 5.0

From time to time, Michael Liebreich updates his Hydro­gen Lad­der. Hydro­gen Lad­der Ver­sion 5.0 is the latest ver­sion at the time of writ­ing. It was pub­lished in Octo­ber 2023 on LinkedIn.

Hydrogen Ladder 5.0
Hydro­gen Lad­der 5.0 by Michael Liebreich. The illus­tra­tion is slightly sim­pli­fied com­pared to the ori­gin­al. CC-BY 4.0

Note the col­or codes.

  • Red means that there are no real­ist­ic altern­at­ives to hydro­gen for this application.
  • Green means that hydro­gen com­petes with bio­mass or biogas.
  • Yel­low means that hydro­gen com­petes with elec­tri­city and bat­ter­ies. Gray means there are oth­er com­pet­ing solutions.

Note that just because some­thing com­petes with hydro­gen does not mean that the com­pet­ing product is a cli­mate-neut­ral choice. For example, Michael Liebreich has used yel­low for the steel industry, because elec­tri­city can be used instead of coal, oil or gas to heat blast fur­naces. But this does not make the steel industry cli­mate neut­ral. Because, even if you heat the blast fur­nace with elec­tri­city, coal needs to be added in the chem­ic­al pro­cess that con­verts iron ore into pig iron, res­ult­ing in huge amounts of car­bon diox­ide emis­sions. To make steel com­pletely fossil-free, hydro­gen must also be used.

Why create the Hydrogen Ladder?

Michael Liebreich seems to see him­self as one of the few adults in a room filled with over­ex­cited hydro­gen entre­pren­eurs, moneyed investors spray­ing cash over all sorts of hydro­gen pro­jects, and politi­cians and oth­er stake­hold­ers with inflated expect­a­tions. With that in mind, it is reas­on­able to describe the Hydro­gen Lad­der as a means to achieve three things:

  • Cut­ting through hype: There’s a lot of excite­ment about hydro­gen, but also con­fu­sion about where it makes prac­tic­al sense. The lad­der helps cut through the noise.
  • Focus­ing invest­ment: By high­light­ing the most prom­ising applic­a­tions of hydro­gen, it guides invest­ment in research and infra­struc­ture towards the areas with the most poten­tial impact.
  • Man­aging expect­a­tions: The lad­der shows where we should­n’t expect hydro­gen to be the mir­acle solu­tion. It pro­motes real­ist­ic expect­a­tions about hydro­gen­’s role in the clean energy mix.

Conclusions of the Hydrogen Ladder

Michael Liebreich’s main point is that entre­pren­eurs, investors, politi­cians and oth­er stake­hold­ers should focus on the top two rungs (A and B) and wait with the rest.

He argues that just sup­ply­ing the applic­a­tions in the top step (A) with clean hydro­gen would require more green energy than what is pro­duced today. And togeth­er with the second top rung (B), the pro­duc­tion of renew­able elec­tri­city would have to increase five times com­pared to today.

This video record­ing of Michael Liebreich’s key­note speech at the World Hydro­gen Con­gress 2022 gives a good idea of what his mes­sage is. Note that the Hydro­gen Lad­der in the present­a­tion is an older version.


Far from every­one appre­ci­ates Michael Liebreich’s attempt to provide his view of hydro­gen. Sup­port­ers of hydro­gen some­times per­ceive him as overly skep­tic­al, arguing that the Hydro­gen Lad­der down­play hydro­gen­’s poten­tial in the trans­ition away from coal, oil and nat­ur­al gas towards green solutions.

At the same time, the Hydro­gen Lad­der is cri­ti­cized by the oth­er side for giv­ing hydro­gen a more sig­ni­fic­ant role than warranted.

Per­haps this dicho­tomy proves that Michael Liebreich is on the right track? But there are also more nuanced criticisms:

  • Con­flict of interest: Some crit­ics point to Liebreich’s ves­ted interests in cer­tain energy sec­tors, par­tic­u­larly his involve­ment with ChargePoint, a com­pany focused on elec­tric vehicle char­ging infra­struc­ture. This raises ques­tions about poten­tial bias towards elec­tri­fic­a­tion and away from hydro­gen solu­tions, even where hydro­gen may have advantages.
  • Overly focused per­spect­ive: Liebreich’s back­ground primar­ily lies in fin­ance and clean energy con­sult­ing. While this provides expert­ise, some argue it can lead to an over­em­phas­is on eco­nom­ic factors while poten­tially under­es­tim­at­ing the role of tech­no­lo­gic­al break­throughs or shifts in geo­pol­it­ic­al pri­or­it­ies that could reshape the hydro­gen landscape.
  • Arbit­rary timeline: The focus on a ten-year time­frame is some­what restrict­ive. While it aims to look bey­ond imme­di­ate hype, tech­no­lo­gic­al innov­a­tion can occur at unpre­dict­able rates. Break­throughs in hydro­gen pro­duc­tion or stor­age could dra­mat­ic­ally accel­er­ate the viab­il­ity of cer­tain use cases well before the dec­ade mark, while oth­ers might require more exten­ded devel­op­ment periods.
  • Lim­ited scope: The Hydro­gen Lad­der, by its own defin­i­tion, is primar­ily con­cerned with the like­li­hood of large-scale adop­tion and does­n’t fully encom­pass all facets of the hydro­gen dis­cus­sion. It does­n’t deeply address poten­tial niche applic­a­tions where hydro­gen might excel even in smal­ler mar­kets, nor does it fully account for the envir­on­ment­al bene­fits of spe­cif­ic use cases in off­set­ting emis­sions, regard­less of ulti­mate mar­ket size.
  • Sub­jectiv­ity: While Liebreich attempts to ground his assess­ment in sci­entif­ic and eco­nom­ic prin­ciples, there remains an inher­ent degree of sub­jectiv­ity in the weight­ing of vari­ous factors with­in the frame­work. Crit­ics may dis­agree on the emphas­is he places on ther­mo­dy­nam­ics, cur­rent costs, or beha­vi­or­al trends, lead­ing to altern­at­ive inter­pret­a­tions of the lad­der­’s rankings.
  • Lack of nuance: The Hydro­gen Lad­der­’s col­or-coded sys­tem, while visu­ally appeal­ing, can some­times over­sim­pli­fy com­plex issues. Lump­ing diverse use cases into broad cat­egor­ies risks obscur­ing import­ant distinctions.


Nev­er­the­less, the Hydro­gen Lad­der has its mer­its as a frame­work for talk­ing about the role of clean hydro­gen in the near future. The debate is not about wheth­er or not clean hydro­gen has a future, but where it will be most useful.

Whatever the out­come of the con­ver­sa­tion, we can be sure of one thing: There will be a heck of a lot of PEM elec­tro­lyz­ers built in the next ten years and well bey­ond to meet the surge in demand for clean hydro­gen that every­one sees.

The true winners?

Human­ity, avoid­ing a shit­load of car­bon emissions.

Smol­tek, enjoy­ing the sound of cha-ching as PEM elec­tro­lyz­er man­u­fac­tur­ers use Smol­tek Hydro­gen­’s pat­en­ted tech­no­logy to reduce the need for scarce iridium.

You, see­ing your invest­ment in Smol­tek pay off.

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