Green hydrogen is critical for decarbonizing hard-to-electrify sectors, but it faces high costs and investment risks. Here we define and quantify the green hydrogen ambition and implementation gap, showing that meeting hydrogen expectations will remain challenging despite surging announcements of projects and subsidies. Tracking 190 projects over 3 years, we identify a wide 2023 implementation gap with only 7% of global capacity announcements finished on schedule. In contrast, the 2030 ambition gap towards 1.5 °C scenarios has been gradually closing as the announced project pipeline has nearly tripled to 422 GW within 3 years. However, we estimate that, without carbon pricing, realizing all these projects would require global subsidies of US$1.3 trillion (US$0.8–2.6 trillion range), far exceeding announced subsidies. Given past and future implementation gaps, policymakers must prepare for prolonged green hydrogen scarcity. Policy support needs to secure hydrogen investments, but should focus on applications where hydrogen is indispensable.

Natural gas based hydrogen production with carbon capture and storage is referred to as blue hydrogen. If substantial amounts of CO₂ from natural gas reforming are captured and permanently stored, such hydrogen could be a low-carbon energy carrier. However, recent research raises questions about the effective climate impacts of blue hydrogen from a life cycle perspective. Our analysis sheds light on the relevant issues and provides a balanced perspective on the impacts on climate change associated with blue hydrogen. We show that such impacts may indeed vary over large ranges and depend on only a few key parameters: the methane emission rate of the natural gas supply chain, the CO₂ removal rate at the hydrogen production plant, and the global warming metric applied. State-of-the-art reforming with high CO₂ capture rates combined with natural gas supply featuring low methane emissions does indeed allow for substantial reduction of greenhouse gas emissions compared to both conventional natural gas reforming and direct combustion of natural gas. Under such conditions, blue hydrogen is compatible with low-carbon economies and exhibits climate change impacts at the upper end of the range of those caused by hydrogen production from renewable-based electricity. However, neither current blue nor green hydrogen production pathways render fully “net-zero” hydrogen without additional CO₂ removal.