--- title: "Unlocking the green hydrogen economy" canonical_url: "https://www.smoltek.com/unlocking-the-green-hydrogen-economy/8085/" date: 2025-01-15 author: "Thomas Barregren" featured_image: "https://www.smoltek.com/wp-content/uploads/2025/01/unlocking-green-hydrogen-economy.webp" categories: - name: "IR Blog Posts" url: "https://www.smoltek.com/category/ir-blog-posts.md" tags: - name: "fossilfreehydrogen" url: "https://www.smoltek.com/topic/fossilfreehydrogen.md" - name: "green hydrogen" url: "https://www.smoltek.com/topic/green-hydrogen.md" - name: "greenhydrogen" url: "https://www.smoltek.com/topic/greenhydrogen.md" - name: "greentech" url: "https://www.smoltek.com/topic/greentech.md" - name: "hydrogen" url: "https://www.smoltek.com/topic/hydrogen.md" - name: "hydrogeneconomy" url: "https://www.smoltek.com/topic/hydrogeneconomy.md" - name: "Smoltek Hydrogen" url: "https://www.smoltek.com/topic/smoltek-hydrogen.md" --- # Unlocking the green hydrogen economy 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. ## [](https://www.smoltek.com#hydrogen-is-vital-to-industry)**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. ## [](https://www.smoltek.com#low-cost-but-high-price)**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. ## [](https://www.smoltek.com#future-needs-and-environmental-impacts)**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. ## [](https://www.smoltek.com#huge-market-potential-with-obstacles)**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 %. ## [](https://www.smoltek.com#the-achilles-heel-of-electrolyzers)**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. ## [](https://www.smoltek.com#climate-transition-hampered-by-expensive-metal)**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](https://www.smoltek.com#87a919f9-25db-48e7-a2e0-3b2431724baa) 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. ## [](https://www.smoltek.com#the-holy-grail-of-the-hydrogen-industry)**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. ## [](https://www.smoltek.com#the-math-behind-the-goal)**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](https://www.smoltek.com#7906a44c-7e97-48a1-830e-e8d2326939db) 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. ## [](https://www.smoltek.com#a-technological-revolution-within-reach)**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.