Katerina Swanson
Hydrogen fuel is an alternative to conventional fuels such as gasoline and diesel. Unlike traditional fuels, hydrogen is measured in kilograms instead of litres or gallons. The cost of hydrogen fuel varies across the world, influenced by factors such as production methods, scale, and technology used. In the UK, hydrogen fuel typically costs between £10 and £15 per kilogram, while in the USA, it costs around $16 per kilogram. In California, the price of hydrogen has been higher, reaching up to $36 per kilogram in 2023, making it significantly more expensive than driving an electric car. However, prices are expected to decrease in the future due to advancements in technology and increased production of green hydrogen. China and Australia have similar expectations, with China aiming for a cost below $4.69 per kilogram by 2025 and Australia targeting a cost of around $2.40-$2.80 per kilogram by 2030.
| Characteristics | Values |
|---|---|
| Hydrogen fuel cost in the UK | £10-£15 per kg |
| Hydrogen fuel cost in the USA | $16 per kg |
| Renewable hydrogen cost via electrolysis | $3-$6 per kg |
| Hydrogen fuel cost in China | $6-$11 per kg |
| Hydrogen fuel cost in California | $14 per kg |
| Hydrogen fuel cost in Australia | $2.76-$4.14 per kg |
| Hydrogen fuel cost in Germany | $14.78 per kg |
| Hydrogen fuel cost in Spain, Germany, and France | High |
| Hydrogen fuel cost in Los Angeles | $16-$36 per kg |
| Hydrogen fuel cost by 2030 | $2-$2.8 per kg |
| Hydrogen fuel cost by 2031 | $1 per kg |
| Hydrogen fuel cost by 2040 | £1.50 per kg |
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What You'll Learn
Hydrogen fuel costs in the USA
Hydrogen fuel has been touted as a sensible fuel option for zero-emission heavy-duty vehicles like freight trucks, locomotives, and ships. Hydrogen-powered vehicles have the advantage of longer ranges and lighter overall weight due to the absence of heavy batteries. However, the high cost of hydrogen fuel remains a significant barrier to its widespread adoption.
In the USA, the price of hydrogen fuel varies, typically ranging from \$11/kg to \$16/kg at smaller production scales. In California, hydrogen fuel generally costs about \$25 per kilogram, which is significantly higher than the national average. At this price, it would cost approximately \$135 to fill up a standard car with hydrogen, making it much more expensive than gasoline.
The high cost of hydrogen fuel is primarily due to the expenses involved in compression and delivery, which make up a large proportion of the retail cost. The production cost of hydrogen is relatively low, especially for conventional hydrogen produced from natural gas, which costs around \$1.50 per kilogram. However, this method of hydrogen production has a significant carbon footprint. Renewable hydrogen produced via electrolysis costs between \$3 and \$6 per kilogram, but this price is expected to decrease over time with advancements in technology and increased production volumes.
To address the high cost of hydrogen fuel, the US Department of Energy (DOE) has outlined research and development priorities to achieve cost reductions for clean hydrogen. The DOE's Hydrogen and Fuel Cell Technologies Office aims to reduce the cost of zero-emission hydrogen to \$1/kilogram by 2031, with an interim target of \$2 per kilogram by 2026. These targets are part of broader initiatives to expand hydrogen infrastructure and lower production costs, including increasing the installed capacity of electrolysers. Tax credits and subsidies have also been introduced to incentivize the production and use of clean hydrogen, positioning it more competitively against grey hydrogen from fossil fuels.
In summary, while hydrogen fuel has the potential to revolutionize the transportation industry, especially for zero-emission heavy-duty vehicles, the current high cost of hydrogen fuel in the USA is a barrier to its widespread adoption. However, with ongoing initiatives and advancements, the cost of hydrogen fuel is expected to decrease in the coming years, making it a more viable and sustainable alternative to fossil fuels.
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Hydrogen fuel costs in the UK
The cost of hydrogen fuel in the UK is expected to decrease in the future. Renewable hydrogen produced via electrolysis currently costs between $3–$6/kg, but analysts predict that this will drop significantly over the next decade. By 2040, a Celtic Sea wind farm conversion project led by British-based renewables company Source Energie and electrolysis pioneer ERM Dolphyn is expected to produce hydrogen at a cost of around £1.50/kg.
The UK government is also investing in the development of hydrogen infrastructure. In 2023, a British startup received an £8 million grant to build four new hydrogen refuelling stations, and in 2024, Element 2 received £8 million in government funding to build four more stations, with one planned for Teesside Airport. Hydrogen developers H2 Green and Element 2 aim to create a UK-wide network of 800 hydrogen refuelling stations for HGVs by 2027, increasing to 2000 by 2030, with car access also available.
Despite these efforts, the UK's hydrogen refuelling network has been shrinking, and there are currently only around 11-15 hydrogen filling stations operational across the country, with only about six accessible to the public. This limited infrastructure is a significant challenge for the broader adoption of hydrogen fuel cell vehicles (HFCVs).
While hydrogen fuel cell cars have advantages such as low emissions and quick refuelling, they are currently more expensive to buy and run than conventional or battery-electric vehicles (BEVs). For example, the Hyundai Nexo costs nearly £70,000, while the similarly-sized Hyundai IONIQ 5 can be purchased for under £40,000. However, hydrogen car manufacturers like Toyota and Hyundai are optimistic about the future of hydrogen power, and costs for hydrogen fuel cell cars are expected to decrease as infrastructure improves and fuel cell production becomes cheaper.
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Hydrogen fuel costs in China
China is the largest producer of hydrogen today, producing about 25 million tons, or roughly a quarter of the global total. Most of the volume is produced from fossil fuels (60% from coal and 25% from natural gas) as feedstocks in refineries or chemical facilities. However, China is increasingly exploring the production and use of low-emission hydrogen to help meet energy needs and spur industrial development while also addressing climate concerns.
China's interest in hydrogen development began with its use in the transportation sector in the early 2000s. Policymakers saw the growing auto sector and the attendant rise in fuel imports as a source of strategic vulnerability and an aggravator to air pollution in cities. At the end of 2020, there were 8,400 fuel cell vehicles (FCVs) deployed in China, making the country the third-largest FCV market and the first for fuel cell trucks and buses in the world.
China is already the largest hydrogen producer (mostly from unabated fossil fuels) and the third-largest market for FCVs in the world. A massive renewable power generation capacity in China could help underpin the rapid expansion of renewable-based hydrogen. The cost of hydrogen production from coal remains very low. However, because diesel is already a relatively expensive fossil fuel, some green hydrogen investors have suggested that the cost gap is easier to bridge with other fossil fuels, potentially making it an easier sell for use in road transport.
China's largest green hydrogen refuelling station is selling H2 at 35 yuan per kilo ($4.86/kg), near cost parity with diesel, according to reporting by the Chinese newspaper Hunan Daily. This is about a seventh of the cost of the fuel in California, where hydrogen has retailed for approximately $14.00 per kilogram (kg), which is equivalent to $14/gallon gasoline. By comparison, in the UK, hydrogen fuel generally costs motorists between £10 and £15 per kilogram.
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Hydrogen fuel costs in California
California has been at the forefront of hydrogen adoption, with a focus on decarbonization and renewable energy integration. However, the state has recently experienced a surge in hydrogen fuel costs, with prices doubling to $32 per kilogram for gray or "dirty" hydrogen. This price includes not only the direct costs of production but also the expenses related to transportation, distribution, and regulatory compliance.
The high cost of hydrogen fuel in California can be attributed to several factors. Firstly, the limited availability of dedicated hydrogen infrastructure, especially in regions with emerging hydrogen economies, has increased transportation costs. The unique challenges posed by hydrogen's low energy density and reactivity require specialized infrastructure for its transportation and distribution, adding to the overall cost.
Secondly, the shift towards cleaner, low-carbon hydrogen sources has impacted costs. Gray hydrogen, produced from fossil fuels through carbon-intensive processes, has long been the dominant source due to its cost-effectiveness. However, its environmental impact has led to a premium on cleaner alternatives, widening the cost differentials within the market.
Additionally, California's historic retail hydrogen prices have been kept relatively low due to grants from the California Energy Commission (CEC), which covered the cost of building and maintaining hydrogen retail stations. However, with the state facing challenges in expanding its hydrogen infrastructure, it is unclear how sustainable this level of financial support will be.
The rising costs of hydrogen fuel in California have had a notable impact on hydrogen car owners, who have been limited to driving within the state and small sections of neighboring states due to the sparse network of hydrogen pumps. This has led to a black market for hydrogen fuel cards and impacted the resale value of hydrogen cars.
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Hydrogen fuel costs in Australia
The cost of hydrogen fuel in Australia is influenced by the production method and energy source used. Fossil-based hydrogen, produced through steam methane reforming, currently ranges from AU$2 to AU$3 per kilogram. Green hydrogen, on the other hand, is more expensive, with current costs ranging from AU$4 to AU$6 per kilogram. However, green hydrogen costs are expected to decrease over time, with predictions of a 37% reduction by 2030.
Australia has set an ambitious target of achieving AU$2 per kilogram for green hydrogen production. This target is based on the need for competitive pricing to drive the adoption of green hydrogen as an alternative fuel. To reach this goal, electricity costs must be below AU$50/MWh, and power prices need to be below AU$30/MWh.
The success of green hydrogen in Australia will depend on cost reductions and policy settings. With improvements in technology and innovation, it is expected that green hydrogen production costs could reach or even fall below AU$3 per kilogram in the near future. Australia aims to become a major exporter of green hydrogen, promoting economic growth and contributing to the transition to net-zero emissions by 2050.
In summary, hydrogen fuel costs in Australia are currently high but are expected to decrease over time. The country is investing heavily in the hydrogen industry and has set ambitious targets for cost reduction. The success of green hydrogen as an alternative fuel will depend on achieving competitive pricing and favourable policy settings.
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Frequently asked questions
In the USA, hydrogen costs around $16 per kilogram. However, prices vary across states. For example, in California, the price of hydrogen fuel is around $30 per kilogram, whereas in North America, the price is typically around $11 per kilogram.
In the UK, hydrogen fuel costs motorists between £10 and £15 per kilogram.
The cost of hydrogen fuel is expected to decrease in the future. The US Department of Energy has outlined its research and development priorities to achieve cost targets for clean hydrogen. The cost of hydrogen fuel is expected to be $1 per kilogram by 2031.
