Renowned clean hydrogen sceptic Michael Liebreich stunned an industry conference in London in late June with perhaps his most damning assessment of the sector’s prospects. He told a room full of project developers that they have failed to do the basic arithmetic when drawing up their business plans and called some of the planned new applications for hydrogen “insanely stupid”. 

Liebreich, chairman of advisory firm Liebreich Associates, said he struggled to see viable use cases for green hydrogen. Hydrogen is not a good fuel; it is not good for heating and will not work for transport applications, he told the FT Hydrogen Summit 2025.

“I have never seen an industry where the divide between the expectations and what the techno-economics can actually deliver is so wide” Liebreich, Liebreich Associates

Even green ammonia, which has emerged recently as the most promising derivative, is not going to gain traction because it is too expensive. “And it does not have the learning rates to get it to being affordable,” Liebreich said.

 “We should wake up and course correct,” he said. “I have never seen an industry where the divide between the expectations and what the techno-economics can actually deliver is so wide.”

Liebreich’s coup de grace was his characterisation of the clean hydrogen sector as a gradually deflating “souffle” as it is taken out of the oven. “It is not a hydrogen bubble that goes pop and it is all over—it just sort of collapses slowly.”

He cited the cost of renewable power, at least in Europe, as a key reason why the economics of green hydrogen simply do not stack up. Liebreich even took issue with the developer of a major green hydrogen and ammonia project in South Africa, who said he could achieve a cost of $2/kg for green hydrogen on the back of cheap and highly efficient solar power. “Count me out. You are not going to do hydrogen for $2/kg, Liebreich said. “I was in the [Mideast] Gulf earlier this year, and they are struggling, in much of the Gulf, to get to $5/kg,” he told the conference.

Several speakers said making cost comparisons between green hydrogen and fossil fuel alternatives is flawed because the external cost of carbon is not priced into oil and gas, equating to billions of dollars of subsidies for fossil fuels every year. Hydrogen should be measured only against other low-carbon options, rather than fossil fuels. “It is just not comparing apples with apples,” said Sundus Ramli, CCO of power-to-x at Danish hydrogen technology firm Topsoe.

Liebreich found an ally in the room in the form of Octopus Energy, one of the UK’s fastest-growing green power suppliers and, until recently, a hydrogen enthusiast. William Rowe, who launched the Octopus hydrogen business in 2021, said the firm’s original idea had been to produce green hydrogen from cheap curtailed renewable power, allowing it to produce at around £5/kg ($6.8/kg) delivered to the end-user. Having got a project up and running, Octopus realised the economics did not work as they had expected. “The reality was, it is just not true,” said Rowe. Flexibility and storage now look to be a better way to manage curtailed power, while price signals in the market will decrease the overall amount of curtailing on the system, he said.

The killer blow for Octopus’ foray into hydrogen was cost inflation in the supply chain, Rowe said. “What we found was that we were actually getting inflation on the supply chain for hydrogen rather than deflation. There was no real opportunity to bring the cost down in many of the elements of what we were trying to buy.”

Doing the math

Ivana Jemelkova, CEO of the Hydrogen Council, an industry association, led the fight back  after Liebreich’s demolition of the case for clean hydrogen.

“First of all, I think all of you in this room can do your math, and secondly, we are thinking about hydrogen from a systems perspective and a long-term perspective, which to me means that hydrogen has a complementary role to play,” she told the conference. “It is not direct electrification versus hydrogen versus something else. We need all hands on deck.”

Jemelkova cited the rapid development of the hydrogen sector in China as evidence of what can be potentially achieved globally.

“I am listening to the gripes, the complaints: how it is too expensive, it is too difficult, it will never happen,” she said. “You know what—I just came back from China. It is done. Hydrogen costs have come down. They have built the capability, the capacity. China is now dominating the supply chain for electrolyser manufacturing.”

Globally, the hydrogen sector is also on an upward trajectory, Jemelkova said. The amount of capital committed to the sector has grown sevenfold in the last four years and fourfold in terms of projects reaching FID. “That means the industry is moving. Perhaps what is most exciting to me personally is that we are seeing parallels with the scale-up of solar and wind.”

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Author: Stuart Penson