Mapping the Hydrogen Economy
Many people say hydrogen is the fuel of the future and associate it with clean energy. However, not everyone understands that hydrogen comes in different types, depending on its source. Some hydrogen is inexpensive but produces high emissions, while other types are clean but costly. This is where an economic map can help us understand the landscape.
In general, hydrogen is classified according to its production method, with each type having a different cost and emissions profile. Understanding this spectrum is important, because misguided policy and investment could lock us into unsustainable solutions.
Hydrogen production cost spectrum
The least expensive types are grey and brown hydrogen. Both are produced from fossil fuels through steam methane reforming or gasification, at a cost of around USD 1.00 to USD 2.50 per kilogram. The problem is that these processes generate high carbon emissions. Although the technology may remain stable for now, it will face the growing risk of carbon taxes in the future.
One step above them is blue hydrogen. This is produced from fossil fuels, but with the addition of carbon capture and storage technology. Its cost is moderate, at around USD 2.00 to USD 3.50 per kilogram, and its emissions are lower because the carbon is captured. This combination of more affordable costs and lower emissions is driving its growing popularity, supported by policy and increasingly mature technology.
Then there is pink hydrogen, produced through electrolysis using nuclear power. It costs a medium-to-high USD 3.00 to USD 6.00 per kilogram and has zero emissions. This segment depends heavily on each country’s nuclear policy and the design of new reactors.
Green hydrogen and other alternatives
While pink hydrogen relies on nuclear power, green hydrogen is more often cited as a clean solution. It is produced through electrolysis using renewable energy.
Its current cost is among the highest, at USD 3.00 to USD 6.00 per kilogram. Even so, its prospects are promising, as costs are falling rapidly alongside the cost of renewable energy and the expansion of production capacity.
There is also turquoise hydrogen, produced through methane pyrolysis. Its cost could be competitive, at around USD 2.00 to USD 4.00 per kilogram, with low emissions and solid carbon as a by-product. As this solid carbon can be put to further use, the technology—which is still developing—offers an attractive added value.
Meanwhile, white hydrogen, or naturally occurring geological hydrogen, is still being explored. Its cost is not yet known, but it could be very low because it has zero emissions and comes from natural sources.
However, the technology has not been proven at scale. Other methods are also still in research and development, including solar thermochemical and photoelectrochemical production. Their costs remain high and uncertain, but they have considerable long-term potential if significant breakthroughs are achieved.
What does this mean for Indonesia?
This spectrum suggests that green hydrogen is the future, even though it is currently expensive; its costs are falling faster than those of other types. Countries that can rapidly develop renewable energy ecosystems will have a competitive advantage in green hydrogen production.
Indonesia has a major opportunity, with abundant renewable resources including solar, wind, geothermal and hydropower. If managed well, the country could meet its domestic hydrogen needs and become a major player in the export market.
That will depend on consistent policy and the right investment. In addition to energy sources, serious attention must be paid to storage and distribution infrastructure. Without these, hydrogen will be difficult to access and will remain expensive.
Conclusion
The hydrogen economy map shows that green hydrogen is the solution of the future, but a phased strategy is needed. Blue hydrogen can be used as a bridge while renewable energy capacity is built and the cost of green hydrogen production is brought down.
Countries that can read this map and act on it effectively will be well positioned for the future. Those that misread it risk being trapped between two equally undesirable choices: a cheap but unsustainable solution, or a clean but unaffordable one. Indonesia should be able to read the map more easily, given that it has all the resources needed to stay on the right track.