In "What Is Hydrogen Energy," we mentioned that to this day, there is no naturally occurring hydrogen that can be mined. So where does hydrogen come from?
The Most Common Method: Reforming Natural Gas
For a long time, hydrogen has been produced by reforming natural gas:
The carbon produced in this process is ultimately released as carbon dioxide. Hydrogen produced this way is therefore known as "grey hydrogen."
An Age-Old Method: Water Electrolysis
There is also an older method — the kind commonly found in textbooks — which uses electrolysis to split water and produce hydrogen:
In fact, many electrolytic processes produce hydrogen at the cathode as a byproduct. The electrolysis of seawater to produce chlorine is one example — hydrogen is a byproduct of chlorine production. And the oldest industrial application of electrolytic hydrogen production is closer to everyday life than you might think: ammonia, the fundamental feedstock for fertilizers, is synthesized by combining electrolytically produced hydrogen with nitrogen from the air.
Nel, a company based in Northern Europe, is one of the earliest suppliers of electrolytic hydrogen production equipment for this application. In 2026, Nel celebrates its one hundredth anniversary.
Running the Numbers: Cost Is Everything
Anyone who does the math will quickly realize that producing hydrogen through electrolysis can cost more than producing it from natural gas — especially if the electricity itself comes from natural gas. This is precisely why most countries have long relied on natural gas for hydrogen production. And that grey hydrogen is used as a chemical feedstock, not for power generation.
Using electricity to make hydrogen, then using hydrogen to make electricity — isn't that redundant? The answer comes down to cost.
Norway, where Nel is based, has abundant hydropower — nearly all of the country's electricity comes from hydroelectric generation, a naturally occurring source of green power. In a country like that, the economics of electrolytic hydrogen production look very different from ours.
Norway Has More EVs Than Hydrogen Vehicles — What Does That Tell Us?
Which do you think Norway has more of — electric vehicles or hydrogen fuel cell vehicles? The answer to that question essentially defines what hydrogen is actually for.
Hydrogen belongs to the same category as natural gas, oil, carbon, and wood — it is a "fuel," or more precisely, a feedstock, whether for generating electricity or as a raw material in chemical processes. As a result, wherever electric vehicles are sufficient, hydrogen vehicles simply won't appear. In broader terms, if electricity can solve the problem, there is no need to bring hydrogen into the picture.
This article is published by the Tellus Materials editorial team. Tellus Materials specializes in hydrogen energy and energy storage solutions, and is committed to driving Taiwan's energy transition.
