Green hydro­gen is a promis­ing solu­tion for decar­boniz­ing indus­tri­al process­es, but high pro­duc­tion costs are hold­ing back devel­op­ment. A key bot­tle­neck is the reliance on the pre­cious met­al irid­i­um in the elec­trol­y­sis. To make the tech­nol­o­gy eco­nom­i­cal­ly viable, irid­i­um use must be reduced to 0.1 mil­ligrams per square cen­time­ter – a tech­ni­cal chal­lenge that could deter­mine the future of hydro­gen as an ener­gy carrier.

Hydrogen is vital to industry

Hydro­gen is not only the sim­plest and most abun­dant ele­ment in the uni­verse, it is also a fun­da­men­tal part of our indus­tri­al econ­o­my. Glob­al demand is approx­i­mate­ly 95 mil­lion tons per year, with indus­tri­al process­es account­ing for more than 99 % of consumption.

In the petro­chem­i­cal indus­try, hydro­gen is essen­tial for desul­fu­r­iza­tion and hydro­c­rack­ing in oil refin­ing. The chem­i­cal indus­try relies on hydro­gen to pro­duce ammo­nia for fer­til­iz­er – a process that lit­er­al­ly feeds half the world’s pop­u­la­tion. Methanol pro­duc­tion, anoth­er major hydro­gen con­sumer, pro­vides indus­try with chem­i­cal build­ing blocks for count­less every­day products.

Low cost but high price

Less than 1 % of all hydro­gen is pro­duced by elec­trol­y­sis using elec­tric­i­ty from renew­able sources or nuclear pow­er. This low fig­ure is due to the fact that hydro­gen pro­duced in this way is 2–5 times more expen­sive than hydro­gen pro­duced from fos­sil fuels. As a result, 96 % of all hydro­gen is pro­duced direct­ly or indi­rect­ly from nat­ur­al gas, oil and coal, at low eco­nom­ic cost and a sky-high price for the cli­mate. For every kilo­gram of hydro­gen pro­duced today, up to ten kilo­grams of car­bon diox­ide are released direct­ly into the atmosphere.

Unfor­tu­nate­ly, the cli­mate cost pales in com­par­i­son to the pro­duc­tion price. If the indus­try is to switch to green hydro­gen – hydro­gen pro­duced by elec­trol­y­sis of water using elec­tric­i­ty from renew­able sources – the cost must come down to the same low price as its dirt­i­er cousins: gray, brown and black hydrogen.

Future needs and environmental impacts

Hydro­gen is one of the key means to achieve Net Zero Emis­sions (NZE). In addi­tion to being a raw mate­r­i­al for indus­try, as it is today, hydro­gen will per­form two func­tions that are essen­tial for reduc­ing CO₂ emissions:

• Hydro­gen is one of the few solu­tions to reduce emis­sions in sec­tors where direct elec­tri­fi­ca­tion is dif­fi­cult or impos­si­ble (steel, cement, chem­i­cals, long-dis­tance trans­port, ship­ping and aviation).
• Hydro­gen can store ener­gy from renew­able sources for sea­son­al stor­age, con­tribute to grid sta­bil­i­ty and be trans­port­ed between regions.

In this way, hydro­gen can con­tribute 10 % of the emis­sions reduc­tions need­ed to meet the tar­get of no more than a 1.5 °C increase in glob­al warm­ing. But this will require much more hydro­gen than today – and it will have to be low-emis­sion hydro­gen – hydro­gen pro­duced by elec­trol­y­sis with green elec­tric­i­ty, from bio­mass, or from fos­sil fuels where car­bon diox­ide is cap­tured and stored.

Huge market potential with obstacles

In an NZE sce­nario for 2050, the Inter­na­tion­al Ener­gy Agency (IEA) has cal­cu­lat­ed that today’s hydro­gen pro­duc­tion will have to dou­ble by 2030 and increase six­fold by 2050, with 98 % being low-emis­sion hydro­gen. The IEA expects that 76 % of all hydro­gen, or 327 out of 430 mega­tons, will be pro­duced by electrolyzers.

There is lit­tle doubt that the mar­ket for elec­trolyz­ers could explode in the com­ing years.

But…

This assumes that hydro­gen pro­duced in an elec­trolyz­er becomes com­pet­i­tive with hydro­gen pro­duced from fos­sil fuels. The price of green hydro­gen must there­fore be reduced by 50 to 80 %.

The Achilles heel of electrolyzers

So what makes hydro­gen made from cheap water and elec­tric­i­ty more expen­sive than hydro­gen made from expen­sive nat­ur­al gas, oil and coal?

The root cause is the cost of build­ing a PEM elec­trolyz­er. More pre­cise­ly, one cru­cial mate­r­i­al dri­ves this cost: iridium.

This pre­cious met­al is essen­tial for split­ting water (H₂O) into hydro­gen (H₂) and oxy­gen (O₂). It is used on the oxy­gen-pro­duc­ing side of the mem­brane that sep­a­rates the oxy­gen and hydro­gen pro­duc­tion sides.

Climate transition hampered by expensive metal

Irid­i­um is one of the rarest ele­ments in the earth’s crust. 90 % comes from South Africa and Zim­bab­we, with the remain­ing pro­duc­tion com­ing from Rus­sia and North Amer­i­ca. It is so rare that it is not eco­nom­i­cal­ly viable to mine irid­i­um specif­i­cal­ly. Instead, it is extract­ed as a by-prod­uct of plat­inum and nick­el mining.

The glob­al sup­ply of irid­i­um is and will remain very lim­it­ed – only 7–8 tons are pro­duced annu­al­ly.¹ This makes it one of the most expen­sive met­als in the world, 2–3 times more expen­sive than gold.

It doesn’t take much irid­i­um per square cen­time­ter of mem­brane to pow­er the process – just 2 mil­ligrams. Yet the met­al accounts for 20–25 % of the cost of the plant. And the prof­it from large-scale oper­a­tion is neg­li­gi­ble because the mem­brane sur­face area increas­es in pro­por­tion to the num­ber of megawatts the plant must handle.

The holy grail of the hydrogen industry

Irid­i­um is a must. Irid­i­um is expen­sive. And the price is not going down – in fact, it is going up as demand increas­es. So what is the solution?

Use less iridium!

Tiny 2 mil­ligrams may not sound like much. But it’s a huge amount com­pared to what’s need­ed to pow­er the process. In the­o­ry, an atom-thin lay­er of irid­i­um is enough to make hydro­gen. But much more is used. This is due to mate­ri­als engi­neer­ing challenges.

But if green hydro­gen is to be com­pet­i­tive with dirty hydro­gen, the amount of irid­i­um used must be sig­nif­i­cant­ly reduced. There are already elec­trolyz­ers that use half the amount, and in the lab they have man­aged to halve it again. But that is not enough.

To be com­pet­i­tive, the amount of irid­i­um must be reduced by 95 per­cent – to 0.1 mil­ligrams per square cen­time­ter. This is the holy grail of the hydro­gen industry.

The math behind the goal

When you break down the num­bers, it becomes clear why 0.1 mg/​cm² is the holy grail.

At today’s depo­si­tion rates of 1–2 mg/​cm², one gigawatt of elec­trolyz­er capac­i­ty requires about 400 kg of irid­i­um – a stag­ger­ing 5 % of the world’s annu­al pro­duc­tion. At an irid­i­um price of about 150,000 USD per kilo­gram,² the cat­a­lyst cost alone for such a plant is 60 mil­lion USD. A reduc­tion to 0.1 mg/​cm² would reduce this cost to 6 mil­lion USD – a dra­mat­ic dif­fer­ence that fun­da­men­tal­ly changes the cal­cu­lus for large-scale hydro­gen projects.

From a sup­ply chain per­spec­tive, 0.1 mg/​cm² is even more crit­i­cal. With today’s tech­nol­o­gy at 1–2 mg/​cm², the use of elec­trolyz­ers would quick­ly con­sume more irid­i­um than is avail­able, and prices would sky­rock­et. At 0.1 mg/​cm², the equa­tion is very dif­fer­ent. Less than 30 kg of irid­i­um would be required to build one gigawatt of elec­trolyz­er capac­i­ty. Annu­al irid­i­um pro­duc­tion, along with recy­cling of spent cat­a­lysts, would be more than enough to meet the 2050 tar­gets – while meet­ing the needs of oth­er crit­i­cal industries.

A technological revolution within reach

For over twen­ty years, we have devel­oped a unique capa­bil­i­ty to pre­cise­ly grow elec­tri­cal­ly con­nect­ed car­bon nanofibers. Our busi­ness idea is to use this capa­bil­i­ty to solve com­plex mate­ri­als engi­neer­ing chal­lenges in whol­ly owned sub­sidiaries. When we rec­og­nized the hydro­gen industry’s chal­lenge to reduce irid­i­um usage to 0.1 mg/​cm², it was nat­ur­al to cre­ate Smoltek Hydro­gen to find the Holy Grail. Now we are very close.

1. In 2023, about 7 tons (225,000 oz) were extract­ed. In 2024, about 7.7 tons (248,000 oz) were extract­ed. Source: Sta­tista. ↩︎
2. Between Jan­u­ary 1st and 14th, 2025, the price ranges between 155,260 and 185,850 USD/​kg. Source: Strate­gic Met­als Invest. ↩︎