258gas. The by-product, finally, is carbon dioxide. Although this method is worse for the climate, today it is the cheaper method and accounts for about 95% of the world’s total hydrogen production (My Fuel Cell, 2015; Jensen, 2021). In fact, to produce 1 tonne of hydrogen requires two tonnes of methane, forming as much as five tonnes of carbon dioxide in this process. Blue hydrogen, like gray hydrogen, uses non-renewable sources to produce the hydrogen. The difference here is that emissions are reduced with CCS (geological storage of carbon dioxide), which can reduce emissions in the process by up to 95%. However, CCS, like fossil-free steel, is a new and expensive technology that is not yet commercially available (Stensvold, 2018).

259Directionality in Innovation Policy and the Ongoing Failure of Green. . .

Green hydrogen is, as the name suggests, kinder to the climate. Through electrolysis, only water and supplied electricity are used to produce the hydrogen gas. The residual product becomes oxygen and instead of using coke in the iron production, the residual product becomes water instead of carbon dioxide (The Agility Effect, 2020a; Hybrit, n.d.). For the hydrogen gas to be completely green, however, the electricity supplied during the electrolysis is also required to come from renewable sources. Both the production of hydrogen by electrolysis and long transport distances for electricity are associated with energy losses. For example, it is estimated that approximately 30–40% of the energy used in electrolysis is lost (My Fuel Cell,