Hydrogen is emerging as an important energy carrier in global efforts to reduce reliance on carbon-intensive fuels. Because the gas is the same regardless of its origin, a system of “color coding” differentiates hydrogen based on its production method and environmental footprint. This classification helps consumers and policymakers understand the sustainability of the hydrogen they are utilizing.
The vast majority of hydrogen currently produced and consumed globally falls under the “grey” category. This dominance is a reflection of decades of industrial practice and the maturity of its production technology. The designation of a color points directly to the environmental impact created during the manufacturing process.
Defining Grey Hydrogen
Grey hydrogen is defined as hydrogen gas produced from a fossil fuel feedstock, primarily natural gas. Methane, the primary component of natural gas, serves as the chemical foundation for this process. The “grey” term is not a reference to the gas itself, but rather an acknowledgment of the carbon intensity involved in its creation.
This classification exists because the manufacturing pathway results in the release of carbon dioxide directly into the atmosphere. Grey hydrogen is a byproduct of a mature, large-scale industrial process developed before widespread concern about greenhouse gas emissions arose. Its widespread use in industrial processes like oil refining and ammonia production makes it a major contributor to industrial carbon emissions today.
The Production Process
The industry standard for manufacturing grey hydrogen is a method known as Steam Methane Reforming (SMR). This established process uses methane, the main component of natural gas, and subjects it to a high-temperature reaction with steam. The process typically operates at temperatures between 700 and 1,000 degrees Celsius and requires a catalyst, such as nickel, to facilitate the chemical conversion.
The SMR process occurs in two main stages, beginning with the reforming reaction where methane and steam produce hydrogen and carbon monoxide. The second stage, known as the Water-Gas Shift Reaction, then processes the carbon monoxide with additional steam to yield further quantities of hydrogen gas. This final step also produces carbon dioxide as a major byproduct.
While SMR is the most common method, another technique called Autothermal Reforming (ATR) is also used to produce hydrogen from natural gas. ATR involves a partial oxidation reaction, where a controlled amount of oxygen or air is introduced to generate the necessary heat for the conversion. Like SMR, ATR results in significant carbon emissions that are released if no capture technology is installed.
The Environmental Cost of Grey Hydrogen
The core environmental issue with grey hydrogen is that the substantial carbon dioxide produced during the SMR process is vented directly into the atmosphere. Grey hydrogen facilities do not employ any form of Carbon Capture, Utilization, and Storage (CCUS).
For every kilogram of hydrogen gas produced via the SMR method, approximately 9 to 12 kilograms of carbon dioxide are emitted. The global production of grey hydrogen contributes hundreds of millions of tons of carbon dioxide equivalent emissions annually.
Context within the Broader Hydrogen Economy
Grey hydrogen currently dominates the global market because the technology is mature, reliable, and the least expensive production method available. Its affordability, often costing between $1 and $2 per kilogram, is a major factor in its industrial popularity. However, its high carbon footprint makes it incompatible with global climate goals aimed at decarbonization.
This environmental drawback has driven the development of alternative production pathways, which are also assigned a color to indicate their cleaner profile. Blue hydrogen, for example, is produced using the exact same SMR process as grey hydrogen, but with the addition of CCUS technology to capture and store the resulting CO2. This attempts to lower the overall emissions profile, though it still relies on a fossil fuel source.
Green hydrogen represents the lowest-carbon alternative, as it is produced through the process of electrolysis powered entirely by renewable energy sources like wind or solar. While green hydrogen production avoids direct emissions, its higher cost means that grey hydrogen’s established infrastructure and lower price point maintain its current market position. The industry is now focused on scaling up these cleaner alternatives to eventually replace the incumbent grey production method.