Hydrogen Hype vs. Reality: Who’s Actually Using It in 2025?

For years, hydrogen has been hailed as the miracle molecule of the energy transition—flexible, clean, and abundant. Governments, oil majors, and investors have poured billions into hydrogen strategies, with promises ranging from fueling aircraft to decarbonizing steel. But as we cross into the second half of 2025, the time for glossy hydrogen roadmaps is over. The question is no longer if hydrogen can play a role in decarbonization—but where, how, and how much is it actually being used today?

The Hype: A Quick Recap

Hydrogen’s appeal is rooted in its versatility. When produced cleanly—via electrolysis powered by renewables (green hydrogen) or via natural gas with carbon capture (blue hydrogen)—it emits little or no CO₂. It can be stored, transported, and used for energy or industrial processes, and is seen as a replacement for fossil fuels in hard-to-abate sectors like steel, heavy-duty transport, and chemicals.

Governments worldwide have taken note. The EU has committed over €80 billion to hydrogen development. Japan and South Korea have national hydrogen strategies with targets through 2040. The U.S. passed the Inflation Reduction Act (IRA), offering a generous $3/kg tax credit for clean hydrogen production.

But the question remains: who is actually using hydrogen in 2025—and what’s real vs. aspirational?

1. Heavy Industry: The Steel Sector Leads the Way

Of all potential applications, the most meaningful hydrogen deployment today is in heavy industry—especially in steelmaking.

• Sweden’s HYBRIT project, a collaboration between SSAB, LKAB, and Vattenfall, began delivering fossil-free steel to commercial clients in 2024 using green hydrogen as a reducing agent instead of coal. As of mid-2025, small-scale deliveries are being made to automakers including Volvo and Mercedes-Benz.

• Germany has accelerated similar initiatives, with Thyssenkrupp and Salzgitter both piloting hydrogen-based steelmaking. These are still in demonstration stages, but commercial-scale timelines are set for the second half of the decade.

Reality Check: Steel decarbonization via hydrogen is real, but scale is still limited. Costs remain 20–50% higher than traditional steel, and producers are heavily reliant on subsidies or premium green steel pricing.

2. Transport: Heavy Trucks and Buses Making Modest Gains

Hydrogen’s application in transport has been contentious. Battery-electric vehicles dominate the light-duty segment, leaving hydrogen with limited ground to stand on. However, 2025 has seen notable growth in hydrogen use for heavy-duty mobility, especially in Asia and parts of Europe.

• South Korea now has over 3,000 hydrogen fuel cell buses operating in urban fleets, supported by a robust refueling network.

• China leads the world in hydrogen-powered trucks, with more than 12,000 FCEVs (fuel cell electric vehicles) in operation—used in mining, ports, and industrial zones.

• In California, the state’s Hydrogen Highway vision remains under development, with a small fleet of fuel cell trucks and buses used by transit agencies and logistics firms. However, adoption has been slower than expected due to high fueling costs and limited infrastructure.

Reality Check: Hydrogen in transport remains niche. Where it works best is in fleet settings with centralized refueling and short, predictable routes. Long-haul hydrogen trucking remains years away from price competitiveness with diesel or battery-electric models.

3. Power Sector: Backup, Not Baseline

In power generation, hydrogen’s role is still marginal in 2025. While several utilities have announced plans to co-fire hydrogen in gas turbines, very few projects are operating at scale.

• Japan has run hydrogen-ammonia co-firing trials at thermal plants but remains far from full substitution. The focus is primarily on ammonia imports as a hydrogen carrier for power generation.

• U.S. utilities such as Entergy and NextEra are testing hydrogen blends in gas turbines, but most are operating at under 5% hydrogen by volume. These are more proof-of-concept than commercially viable solutions.

• Australia’s Hydrogen Park South Australia delivers a 5% hydrogen blend to thousands of homes for heating and cooking, marking one of the world’s first such residential pilots.

Reality Check: Hydrogen’s use in the power sector is still in the pilot or backup power stage—not base load generation. Its high cost and low round-trip efficiency compared to batteries or renewables make it a last-resort option.

4. Economic and Logistical Hurdles Remain High

Despite progress, hydrogen adoption is still held back by several persistent challenges:

• Cost: Green hydrogen remains significantly more expensive than natural gas. Even with generous incentives like the U.S. 45V tax credit, most hydrogen production projects struggle to compete without long-term offtake agreements and subsidies.

• Infrastructure: Pipelines, refueling stations, storage tanks, and ammonia import terminals are all underdeveloped. Transporting hydrogen remains expensive and technically challenging, especially over long distances.

• Production Bottlenecks: Electrolyzer manufacturing capacity is improving, but delivery timelines remain long, and project execution is often delayed by permitting and regulatory issues.

  
  

5. Where the Momentum Is Building

While global hydrogen use is still modest, several regions are positioning themselves for future dominance:

• Europe: Strong policy support, industrial offtakers, and cross-border hydrogen corridors are advancing, particularly in Germany, the Netherlands, and the Nordics.

• Middle East: Countries like Saudi Arabia and the UAE are investing heavily in green hydrogen and ammonia for export—though most projects are still in early stages.

• United States: Thanks to the IRA, the U.S. is seeing an explosion of project announcements, particularly in Texas, Louisiana, and the Midwest. However, many remain at the FEED or pre-FID stage.

Conclusion: A Promising but Uneven Picture

In 2025, hydrogen is no longer just a buzzword—but it’s also not the silver bullet some headlines might suggest. Its most meaningful deployments are in sectors like steel and public transport fleets, where electrification is not viable and where governments or customers are willing to pay a premium for decarbonization.

The gap between ambition and adoption remains wide—but it's shrinking. Over the next five years, the most successful hydrogen projects will likely be those that:

• Have a clear industrial use case

• Secure long-term offtake agreements

• Are integrated with renewable generation or CCS infrastructure

• Benefit from strong policy and financial support

Hydrogen is not the answer to every energy challenge—but where it fits, it’s starting to deliver.