1. Steam Methane Reforming (SMR): The Current Industry Standard
How it works:
SMR involves reacting natural gas (primarily methane) with steam under high temperatures to produce hydrogen and carbon monoxide. A subsequent reaction with steam produces more hydrogen and carbon dioxide (CO₂).
According to a Hydrogen Generation Market report, the industry is expected to grow significantly in the coming years.
Pros:
Mature and cost-effective: SMR has been the go-to method for hydrogen production for decades. It accounts for roughly 95% of global hydrogen production today.
High efficiency: With efficiencies around 65-75%, it is a relatively energy-efficient process.
Established infrastructure: SMR plants are widespread, and integration with existing natural gas systems is straightforward.
Cons:
High carbon emissions: SMR is a significant source of CO₂. Without carbon capture and storage (CCS), it is incompatible with climate goals.
Fossil fuel dependence: The process relies on methane, making it vulnerable to volatile gas prices and geopolitical tensions.
“Grey” or “Blue” hydrogen: SMR without CCS is termed grey hydrogen (high emissions), while with CCS, it's called blue hydrogen — cleaner, but still not zero-emission.
2. Electrolysis: The Clean Contender
How it works:
Electrolysis splits water (H₂O) into hydrogen and oxygen using an electric current. When powered by renewable electricity, the resulting hydrogen is termed green hydrogen.
Pros:
Zero emissions (when renewable-powered): Electrolysis produces no direct CO₂ emissions.
Sustainable and scalable: It offers a pathway to fully decarbonized hydrogen production.
Flexible and decentralized: Electrolyzers can be sited close to demand centers or renewable energy sources, reducing transport losses.
Cons:
High costs: Electrolysis is still more expensive than SMR, with capital and operating costs heavily dependent on electricity prices.
Lower efficiency: Electrolyzers typically have an efficiency of 60–70%. When including the energy to compress or liquefy the hydrogen, the overall efficiency drops further.
Intermittency: Renewable energy sources like solar and wind are intermittent, which can affect electrolyzer utilization rates and economics.
