The Rumours of Green Hydrogen Death are not greatly exaggerated

For years, green hydrogen was sold as the magic key to decarbonising everything—from steel to aviation to shipping. It was marketed as the clean fuel that would leapfrog fossil dependence and anchor the next industrial revolution. In its decade old pilot phase, it has set the record for the longest flight ever achieved by pilot without an actual aircraft  Today, that dream is colliding with physics, economics, and now even industry abandonment. The writing is on the wall, and it is hard to miss.

A Global Slowdown That Can’t Be Spun Away

The Financial Times report shows the scale of retreat: close to 60 major low-carbon hydrogen projects have been cancelled or frozen this year alone because of spiralling costs, policy uncertainty and a lack of buyers. Companies once considered torchbearers—BP, ExxonMobil, Equinor, ArcelorMittal, Vattenfall, Shell—have stepped back, shelved projects, or walked away entirely.

One example: BP pulled out of planned hydrogen plants in Oman and the UK; Exxon paused what was supposed to be one of the world’s largest hydrogen facilities in Texas. The total output of cancelled or paused projects represents over four times the world’s currently installed clean hydrogen capacity. When industry leaders exit simultaneously, it signals more than a temporary turbulence—it signals structural impracticality.

The Efficiency Trap: When Energy is wasted

Hydrogen’s biggest flaw is baked into physics:
Two-thirds of all input energy disappears across the chain—electrolysis, compression, liquefaction, storage, transport, reconversion.

Put plainly:
For every 1 unit of usable energy you get at the end, you may need at-least 3 units of electricity at the start.

This is the opposite of what an electricity-starved country should chase—especially one where per capita electricity consumption is barely 1 unit per day. When power scarcity is real, feeding enormous volumes of clean electricity into the most inefficient pathway yet invented makes no developmental sense.

Hydrogen may be clean at the tailpipe, but the journey to that tailpipe wastes staggering amounts of precious renewable electricity.

The Inconvenient Physics: How Hydrogen Wastes 70–80% of the Electricity You Feed It

Hydrogen’s biggest problem isn’t money—it’s thermodynamics.

Even if hydrogen were free to make, its inefficiency would still cripple it.

Here is the unavoidable energy chain:

1. Electrolysis – 55–70% efficiency

→ 30–45% of the electricity lost immediately.

2. Compression or Liquefaction – 10–40% energy loss

• Compressing to 350–700 bar costs 10–15%

• Liquefying to –253°C costs ~30%

3. Storage & Transport – 5–10% loss

Hydrogen leaks, boils off, and requires recompression.

4. Reconversion to Electricity – 40–55% efficiency

Fuel cells: ~50% practical
Turbines: ~35–45%

Putting It Together: Real-World Round-Trip Efficiency (RTE)

A realistic overall chain for hydrogen energy storage is:

• Electrolysis: 0.60

• Compression & handling: 0.90

• Storage/transport: 0.95

• Fuel cell/turbine: 0.50

Actual RTE = 0.60 × 0.90 × 0.95 × 0.50 ≈ 0.26 (26%)

If liquefaction is used:

Actual RTE ≈ 20%

Meaning:

Hydrogen wastes 70–80% of the electricity used to make it.

For comparison:

Storage Technology RTE

Lithium batteries  85–92%

Pumped hydro 75–85%

Compressed air 50–70%

Hydrogen 20–30%

This alone makes hydrogen an irrational choice for electricity-scarce countries.

The Affordability Crisis: A Fuel for the Rich, not for the Real World

Even the overview of hydrogen colours acknowledges a brutal truth: green hydrogen is “very expensive due to infrastructure and transportation development costs”.

Add to that:

• Electrolysers are capital-intensive

• Storage tanks require exotic materials

• Pipelines need retrofitting or new networks

• Liquefaction guzzles energy

• Transport over long distances is commercially unviable

Even as a feedstock, green hydrogen remains far beyond the affordability threshold for developing countries. When fertiliser subsidy bills are already heavy, replacing natural gas with green hydrogen today would explode costs.

Why India Cannot Afford Such Inefficiency

India’s per-capita electricity consumption remains roughly 1 kWh per person per day—one-sixth of China’s and one-twentieth of OECD levels.

In such a context:

• A technology that wastes three units of electricity for every one delivered

• And costs several times more than conventional fuels

• And requires billions in new infrastructure

simply does not align with developmental priorities.it is “very expensive due to infrastructure and transportation development costs” .This is not merely high cost—it is high cost multiplied by low efficiency.

If the US Has Stepped Back, Why Is India Charging Forward?

The US Inflation Reduction Act had once turbo-charged investor enthusiasm. Now, even the US is reassessing the viability of its green hydrogen subsidies, slowing or withdrawing support for pathways that simply don’t pencil out.

But India continues offering:

• Production incentives

• Waived transmission charges

• Land support

• Assured offtake proposals

• Grants for pilot plants

—all for a technology that wastes most of the electricity it consumes and remains unaffordable for industries already reeling under cost pressures.

For a country where the priority is raising living standards, electrifying households, and ensuring reliable supply to MSMEs, pushing resources into a low-efficiency pathway risks repeating past policy misallocations—on a much larger scale.

Hydrogen’s Hard-to-Abate Narrative Is Cracking Too

Hydrogen still has a potential niche in sectors like steel, long-distance shipping, or certain chemical processes. But the idea that it will clean everything is evaporating fast. With companies shelving projects and buyers nowhere in sight, even its role in “hard-to-abate” sectors is looking thinner than what early hype suggested.

In reality:

• Direct electrification solves most decarbonisation needs more efficiently.

• Bio-based fuels are scaling faster.

• Carbon capture is improving for industrial clusters.

• Material efficiency and circular economy approaches reduce hydrogen demand altogether.

Hydrogen will likely remain a specialty chemical—not a mass-scale energy carrier.

India’s Choice: Chase Hype or Prioritise Real Impact

Hydrogen’s physics and economics haven’t changed; the world’s patience has. The danger for India is simple:
Investing heavily today risks locking public money into an energy cul-de-sac.

A nation where millions still face supply constraints cannot afford to divert vast renewable power into a process that bleeds energy at every step.

The dream was seductive. The reality is sobering. And the retreat of global majors is not an aberration—it is a signal.

Conclusion: The Rumours Are Not Exaggerated

Green hydrogen, the energy inefficient and uneconomic source of present, will not die completely. It will shrink into a specialised, small-volume niche where it makes sense. But the fantasy of a universal, economy-wide hydrogen revolution is fading—and fast.

For countries like India, the smartest strategy is restraint: Focus on electrification, efficiency, storage, grid strengthening, and renewable scaling—not on pouring scarce resources into the most inefficient clean-energy pathway of them all.

Green Hydrogen will find its place. But it won’t be the centrepiece. And the world is finally admitting it.