Hydrogen production: how does it work?
Can hydrogen be a driver of the energy transition? Yes, but under certain conditions, particularly in its production. Here’s an overview of the different hydrogen production technologies and their associated color codes.
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The most common hydrogen production method: carbon-based hydrogen
The global hydrogen market represents around 100 million tons produced per year according to the International Energy Agency (IEA). The issue: hydrogen production overwhelmingly relies on fossil fuels. The direct consequence is that hydrogen production processes emit CO₂. 2. This is logical: physically, fossil fuels are hydrocarbons, meaning they are composed of hydrogen and carbon. By separating the molecules, we obtain dihydrogen (H ₂), commonly called “hydrogen,” but carbon is released and, when combined with oxygen from the air, forms CO₂.. That’s the chemical side.
Approximately 99%
The share of carbon-based hydrogen in total global production in 2024
Source: AIE
There are two main technical processes for producing hydrogen from fossil fuels:
- The most common is steam methane reforming (SMR) of natural gas, known as grey hydrogen. This accounts for about 60% of the hydrogen produced worldwide.
- Hydrogen can also be produced through coal gasification, resulting in brown hydrogen (from coal) or black hydrogen (from lignite). This represents about 20% of annual global production.
The remaining ~20% comes from by-products, meaning hydrogen generated during industrial processes whose primary function is not hydrogen production.
For hydrogen to become a useful vector for the energy transition, its production must avoid CO₂ emissions.. The good news: although volumes are still very limited, the technologies exist and are ready to be scaled up to industrial levels.
The rarest: natural hydrogen
We speak of white hydrogen (or natural hydrogen) when hydrogen is extracted directly from underground in its natural form. Currently, there is only one white hydrogen production site in the world, in Mali.
In 2022, France recognized white hydrogen as a natural resource in its Mining Code. At the end of 2023, the government authorized for the first time the exploration of white hydrogen reserves in the Pyrénées-Atlantiques. Finally, in June 2025, IFP Energies Nouvelles submitted to public authorities a report assessing the state of knowledge on natural hydrogen. According to the institute, France has proven potential in the Aquitaine Basin, the Pyrenean foothills, the Lorraine coal basin, and New Caledonia—though potential volumes have not yet been estimated.
The most virtuous: low-carbon hydrogen
There are three main technologies to produce hydrogen without emitting CO₂:
- Blue hydrogen is produced from natural gas (and therefore from gray hydrogen at this stage) but with a carbon capture and storage (CCUS) system.To be complete Turquoise hydrogen (still very niche) is produced through chemical separation of fossil fuels, generating solid carbon instead of CO₂ emissions.
- Green hydrogen is produced through water electrolysis. An electrolyzer splits water molecules (H 2O) to create dihydrogen (H2), releasing only oxygen. When powered by renewable electricity (onshore wind, offshore wind, solar PV, etc.), the process yields green hydrogen.
- Yellow hydrogen, also called pink hydrogen, is also produced by electrolysis of water, but in this case, the electrolyzer is powered by nuclear electricity.
According to the AIE, in 2024, global low-emission hydrogen production came from over 50% blue hydrogen (natural gas with CCUS) and less than 50% green hydrogen (electrolysis powered by renewable electricity).
1 million tons
Estimated global-low-emission hydrogen production in 2024 (+50% compared to 2021)
Source: AIE
An economic model to be found for carbon-free hydrogen production
Progress can of course be made, but overall, current technical processes are well mastered. The main obstacle to the development of low-carbon hydrogen is not technological, but economic.
Of course, the production costs of grey hydrogen depend directly on natural gas prices (which can be very volatile on wholesale markets, as illustrated by the price surge in Europe in 2022) and on the level of CO₂ taxation (for example, in the European carbon market EU-ETS ). The cost of blue hydrogen also depends directly on gas prices, but also on the cost of CCUS technologies. Finally, the production costs of green and yellow hydrogen vary respectively according to the cost of renewable energy generation and nuclear electricity. Still, the production cost of green hydrogen can be two to three times higher than that of grey hydrogen… raising the question of subsidies to the low-carbon sector to help it take off.
In April 2025, France updated its national hydrogen strategy, known as “SNH II.” Here are the key takeaways:
- The targets for installing electrolysis capacity have been revised downward to 4.5 GW in 2030 and 8 GW installed in 2025 (compared to 6.5 GW in 2030 and 10 GW in 2035, respectively, as planned in the first version of the national hydrogen strategy “SNH I”).
- A support mechanism for low-carbon hydrogen production endowed with €4 billion over 15 years.
- The relaunch of the “Hydrogen technological building blocks IDH2” call for projects led by ADEME.
For the moment, however, the French hydrogen production sector via electrolysis has not truly taken off, as shown by the installed capacity of 35 MW at the end of 2024 (compared to 30 MW at the end of 2023).
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What are the priority uses for low-carbon hydrogen?
Even though low-carbon hydrogen production is trying to ramp up, volumes remain very limited. This immediately raises the question of priority uses, since hydrogen can be used as a fuel in industry, in road transport, or in derivative forms for maritime and air transport (we are referring ere to sustainable aviation fuel, or SAF for short.)
Two priority targets, at least in the short term, appear to be emerging:
- Replacing carbon-based hydrogen currently used in certain industrial production processes (such as ammonia for fertilizers, oil refining, etc.) with low-carbon hydrogen.
- Replacing fossil fuels used in industry with low-carbon hydrogen, particularly in industrial processes where electricity—even low-carbon electricity—cannot be used as an energy vector.
