Insider Brief:
- Green hydrogen production is growing as a way for hard-to-abate industries tackle emissions, but is beset with high production costs and capital allocation certainty.
- Climate Insider has specific insights on how to navigate this uncertainty, and also understand which technologies and processes are ready for market.
- Click here to download the full version of the report.
Green hydrogen is being considered and adopted by a range of industries in 2025, including by industrial manufacturers, energy providers, public funding agencies, and infrastructure developers. A new report from Climate Insider outlines critical strategic frameworks in how to navigate new and developing hydrogen technologies and not be left behind. This report offers a roadmap for businesses navigating the next decade of green hydrogen development.
The report, Green Hydrogen: Mapping the Technological Pathways, Strategic Partnerships, and Funding Mechanisms Driving Canada’s Emerging Hydrogen Economy Through 2025, evaluates the current status of green hydrogen technologies across technical, policy, market, and organizational dimensions. Its findings highlight both the opportunities and risks facing industrial users, utilities, and governments investing in the technology.
Click here to download the full version of the report.
Market overview
Green hydrogen has a multitude of uses across several industries. In hard-to-abate industries such as steel and cement, green hydrogen provides feedstock for heavy industry, as well as decarbonizing industries relying on high-heat processes. For energy providers, green hydrogen unlocks grid capacity and firm capacity at scale, while infrastructure developers can derisk system integration by incorporating green hydrogen early into its architecture.
With the rapid development of green hydrogen technologies, there is a confluence of factors creating a sense of urgency in deployment and adoption of this technology. Increasing political pressure to meet ever more ambitious climate targets mean that hard-to-electrify sectors such as steel, cement, chemicals, and heavy transport are facing substantial pressure to met guidelines. Changing subsidies in the US, EU, India, and China can be difficult to navigate. With many projects facing delays due to policy uncertainty and infrastructure bottlenecks, organizations need strategic frameworks to navigate this pivotal moment and avoid being left behind as early market advantages crystallize.
Green Hydrogen deployment Milestones and Leading Designs
The report details the green hydrogen production develops that are already underway. Electrolysis (water splitting) is mid-stage and at commercial level, and has several key advantages. The supply chains to provide materials for this technology are already mature, and the technology itself is high-efficiency. There also exists the possibility to adopt the technology to modular, decentralized options. The main challenges facing these technologies come in the forms of thermal and water management, durability risks, and material cost.
Biothermal and chemical technologies to produce green hydrogen – such as gasification, pyrolysis, combustion, and liquefaction – are early- to mid-stage in development, with several advantages. It can provide renewable waste feedstock, and can produce value-added byproducts such as biochar and syngas. There is also potential for carbon neutrality.
Early-stage technologies in hydrogen production include biological processes, such as dark fermentation and bio-photolysis; photoelectrolysis; and thermochemical water splitting. While biological processes and photoelectrolysis both promise low emissions and thermochemical water splitting leads to continuous hydrogen production, drawbacks include high costs and durability risks.
Climate Insider also details green hydrogen and storage methods in terms of their advantages, challenges, and commercial deployment possibilities. For compression storage, it requires high-pressure containers. This compression is high-energy and generates significant heat, a factor that will need to be considered when determining storage methods.
Industry pain points
The primary difficulty in managing these ever-evolving green hydrogen production and implementation technologies is the high production costs and the uncertainty in capital allocation. Investing in green hydrogen technologies is expensive, and is further complicated by the difficulty in securing enough renewable energy resources due to widespread competition across industries. Policy uncertainty and extensive project delays also increase the complexity in timing investments accordingly.
Climate Insider has identified three main infrastructure issues that companies in many industries will need to address:
- Storage challenges: Storage in hydrogen is a complex process, which requires a lot of energy. As a result, storage often needs a high amount of capital, both to operationalize storage and maintain storage. Hydrogen is also often lost during compression and decompression, while those using liquid storage can lose hydrogen via evaporation. There are also safety risks as a result of high pressure, cryogenic temperatures, and flammability.
- Transportation Efficiencies: Hydrogen needs to be transported at high pressures to overcome its low density. This requires pipelines and storage systems made of hydrogen-compatible materials and compression stations to maintain flow over long distances. Challenges in hydrogen transportation include safety, due to the flammability of the gas and the need for strict safety protocols during transport. The low volumetric energy density of hydrogen also requires either high-pressure storage or liquefaction.
Organizational Readiness and Strategic Partnerships
The report argues that commercial success will depend not only on timely deployment of relevant hydrogen technologies but also on coordination with relevant stakeholders. Companies looking to uptake green hydrogen will need to rely on robust hub-and-spoke offtake networks, direct relationships between users and storage methods. The success of deployment will also depend on clarity in government positioning regarding green hydrogen development.
Partnerships are already forming across the green hydrogen ecosystem. TCO and Suncor are jointly managing hydrogen production using natural gas with carbon capture, while Suncor is also in charge of carbon sequestration. ATCO oversees the pipeline infrastructure to deliver hydrogen across multiple industries, enabling a coordinated, role-optimized partnership.
These alliances help lessen development risk, and align technological advancements with business requirements. However, readiness across organizations and producers remains uneven.
Readers will gain actionable information to:
- Overcome cost barriers through optimal technology selection and timing strategies that account for electrolyzer efficiency improvements and material cost trajectories;
- Navigate electricity resource competition with decision frameworks for renewable energy allocation and grid integration strategies;
- Address storage and transportation challenges through infrastructure optimization approaches that manage safety risks while achieving economic scale;
- Sequence investments to minimize stranded asset risk during this technological innovation window while capturing policy incentives and early market positioning;
- Structure partnerships and financing that mitigate project delay risks and infrastructure bottlenecks through proven collaborative models.
Strategic Recommendations
Climate Insider closes the report with strategic recommendations on developing and integrating hydrogen solutions.
Click here to download the full version of the report.
For more information, or to connect with our analysts, contact us directly at [email protected].
