Where can you obtain hydrogen? Tips for industry leaders
As more industries look towards sustainable, cost-effective energy solutions, hydrogen has emerged as an ideal solution. Often referred to as the fuel of the future, hydrogen has the potential to power a wide range of applications—from transportation to large-scale industrial processes. But organisational leaders may be wondering, where exactly do you get it from?
Understanding hydrogen sourcing, production, and procurement is key to harnessing its benefits—reducing carbon footprints, achieving energy independence, and driving long-term sustainability outcomes.
The most abundant element in the world, hydrogen is an excellent, versatile energy carrier. It can be used in fuel cells to provide electricity, energy for cooling and heating, clean fuel for vehicles, and more.
Production methods and sustainability
What makes hydrogen particularly exciting is that some production methods produce zero emissions. Green hydrogen, for instance, is generated through electrolysis, powered by renewable energy sources. When consumed in a fuel cell, the byproducts are electricity and water vapour – making it a clean alternative to fossil fuels.
Note: not all hydrogen is created equally, and how it’s produced can impact its environmental footprint. There are several ways to produce hydrogen, and they fall into two broad categories: renewable (green hydrogen) and non-renewable (grey, brown, and blue hydrogen). Find out more in our article: The different colours of hydrogen & strategic sustainability leadership.
Two options: Make or buy
There are, essentially, two main pathways to obtain hydrogen: make it, or buy it. Each option is potentially viable and can offer different advantages, depending on your organisation’s goals, resources, and operational requirements.
Option 1: Make your own hydrogen on-site
Producing hydrogen on-site can provide you with a degree of energy independence and supply control. By investing in technology, such as electrolysers, you can produce green hydrogen directly using renewable electricity (such as solar). This method is especially attractive for companies looking to sure up their supply chain while achieving long-term sustainability goals.
Many companies across a range of industries are adopting this method to produce hydrogen on-site and achieve advantages, such as:
Energy independence – gaining greater control over energy supply and reducing the risk of supply chain disruptions.
Improved sustainability outcomes – through on-site production that uses renewable energy to meet carbon reduction targets.
Energy price stability – avoiding fluctuating market prices and external supplier costs.
There are, of course, some challenges to keep in mind, such as:
Initial investment and set up – Setting up hydrogen production infrastructure can require time and capital investment.
Available power – you may be able to utilise renewable energy sources (such as solar), but supplement this usage with grid power (which might come from a mix of energy sources, including fossil fuels, which contribute to carbon emissions – read more about green hydrogen and power usage). (However, it’s possible to offset any associated carbon emissions through the renewable certificate programs.)
Support from a technical partner, such as Endua, can help businesses overcome these challenges, gain expertise, and design a suitable technology system in line with your needs. It’s a great way to navigate these complexities, minimise risks, and maximise operational efficiency.
Option 2: Buy hydrogen from external suppliers
What if you’re interested in exploring options to procure hydrogen from an external supplier? As an alternative to onsite production, you may be able to find large, industrial producers of hydrogen or hydrogen refuelling networks that are accessible locally.
Organisations choosing to buy hydrogen will need to factor in the associated challenges, logistics, and expenses for delivery or round-trip collections. But note: even when local suppliers are available, the delivery costs, on top of the price to purchase hydrogen, can be significant.
If purchasing hydrogen externally, considerations may include:
Green hydrogen – Can local hydrogen suppliers provide sustainable, green hydrogen?* (Depending on how hydrogen is generated, this can impact Scope 1, 2, and 3 emissions reporting.)
Supplier location – How many kilometres away are suppliers located? Do they offer collection or delivery, and how will this impact operations?
Travel emissions – Will transporting the hydrogen to your site cause increased GHG emissions? (Another factor in Scope 1, 2, and 3 emissions reporting.)
Continuity of supply – Will the chosen supplier be capable of providing you with enough hydrogen at the required cadence to ensure smooth operations? (External suppliers can expose businesses to supply chain disruption risks, market volatility, and fluctuating prices.)
Limited control over sustainability – some suppliers may offer grey hydrogen, resulting in emissions; businesses focused on sustainability may find it harder to ensure their hydrogen is truly green.
Price fluctuations – relying on purchased hydrogen over time may become more expensive compared to producing it in-house, as demand grows and prices fluctuate.
*How do you know the hydrogen you’re buying is clean/green? The Australian Government is currently developing labelling mechanisms and a framework for the certification of low-emissions hydrogen so Australian customers can understand what they’re purchasing.
Understanding and considering the factors involved in purchasing hydrogen will hopefully guide you in your decision making. If challenges and costs exceed the benefits, including if hydrogen suppliers are longer distances away than manageable, you may determine that creating hydrogen onsite is a more accessible, achievable solution.
Choosing the right hydrogen solution for your business
For businesses, the decision to make or buy hydrogen will ultimately depend on your unique situations, goals, and needs. In considering on-site production, advanced electrolyser technology and renewable energy integration are making it easier and more affordable to produce green hydrogen.
Gaining support from the right hydrogen technology partner, such as Endua, can position you for success. Not only can a technology partner provide guidance around energy needs, calculations, production and consumption, it offers other key advantages such as greater insight, expertise, and assistance to tailor the right solutions.
At the end of the day, one thing is clear: hydrogen has a central role in reducing emissions, evolving industries, helping organisations achieve energy independence, and driving the clean energy transition.
Considering hydrogen sourcing options will position your business to harness the power of hydrogen and pave the way for a more sustainable, resilient future.
If you’re motivated to prepare your organisation for the future with renewable energy, get in touch with our team to start a conversation.