The appeal of hydrogen fuel cells has long been obvious. Because these devices use electrochemical reactions to generate electricity from hydrogen, emitting only heat and water in the process, they offer a particularly green source of power, especially for vehicles. What has not been so obvious, however, is how to make hydrogen fuel cells practical. In 2009, Steven Chu, then the U.S. secretary of energy, told an interviewer that in order for hydrogen fuel-cell transportation to work, “four miracles” needed to happen. First, scientists had to find an efficient and low-cost way to produce hydrogen. Second, they had to develop a safe, high-density method of storing hydrogen in automobiles. Third, an infrastructure for distributing hydrogen had to be built so that fuel-cell vehicles would have ample refueling options. Fourth, researchers had to improve the capacity of the fuel-cell systems themselves, which were not as durable, powerful, and low cost as the internal combustion engine. Chu concluded that achieving all four big breakthroughs would be unlikely. “Saints only need three miracles,” he added.

Accordingly, the U.S. Department of Energy dramatically cut funding for fuel cells, reducing its support for various programs to nearly a third of previous levels. For the rest of Chu’s tenure, the department awarded nearly no new grants to develop the technology at universities, national labs, or private companies. Although the department’s total expenditures on fuel cells and hydrogen had always amounted to a small fraction of overall global investment in the sector, the change in posture sent a deeply pessimistic signal worldwide.

Immediately after Chu’s comments made the rounds, the hydrogen community issued a defense, contending that major progress had been made. But the damage was done. The press picked up on the Obama administration’s snub, and positive articles about hydrogen fuel cells virtually disappeared. Universities stopped hiring faculty in an area perceived to be dying, top students fled to other subjects, and programs at national labs were forced to reconfigure their efforts. Established scientists saw an abrupt decrease in funding opportunities for hydrogen and refocused their research on other technologies. The overall effect was a drastic shrinking of the human-resource pipeline feeding hydrogen and fuel-cell research.

Producing hydrogen now costs less and emits less carbon than ever before.

All of this was not necessarily a bad thing: new technologies come along all the time, pushing aside older ones that are no longer bound for the market. In the case of hydrogen fuel cells, however, scientists really had made big breakthroughs, and the technology was finally in the process of hitting the market. Rather than redirecting limited resources to more realistic technologies, the U.S. government’s policy arguably amounted to pulling the rug out from under hydrogen and fuel-cell research and development in the United States and handing over leadership in the sector to other countries. Patents are perhaps the best indicator of how much practical progress a technology is making, and even as the U.S. government decreased its support for research into hydrogen fuel cells (and increased its support for other clean energy technologies), the number of U.S. patents related to fuel cells continued to dwarf those of other energy technologies, with the exception of solar power.

At the same time, however, more of those patents went to Asian entities. In 2012, Japan surpassed the United States as the top grantee of U.S. fuel-cell patents, with South Korea in third place. And that same year, with global players making progress on commercialization, Chu had a little-known change of heart. “Now the economics are looking good,” he said. “The carbon footprint looks much better.” What seems to have taken Chu by surprise was the newfound abundance of U.S. natural gas, which can now be processed economically into hydrogen, and the lack of anticipated progress on batteries, a technology in which the U.S. Department of Energy had invested heavily.

Chu’s about-face had little practical effect, however, given that he left office in 2013. Even though the Department of Energy has recently reinstated some of its support for hydrogen fuel-cell research, it is funding that research at significantly lower levels than it once did. And so at the same time as the sector has lost one of its biggest sources of support, it has seen a major leap forward in terms of practical application.


Each of the four miracles Chu mentioned in 2009—involving the production, storage, distribution, and actual conversion of hydrogen—is starting to materialize. Producing hydrogen now costs less and emits less carbon than ever before. In part, that is the result of the United States’ newfound abundance of natural gas, the source of most of the hydrogen produced. But it is also the result of technological improvements in the process of “reforming” natural gas into hydrogen. It now costs around as much to produce a gallon of gasoline as it does to produce the energy-equivalent amount of hydrogen with natural gas. Meanwhile, another method of producing hydrogen—electrolysis, which uses electricity to split water into hydrogen and oxygen—has seen major cost reductions as well. What makes electrolysis particularly attractive is that when powered by renewable sources such as wind and solar power, it directly emits zero carbon.

Hydrogen storage has also improved. Prototypes used to feature bulky containers that were retrofitted into vehicles designed for conventional engines. But the latest tanks save space by being better integrated into the design of a car and by safely storing hydrogen at a higher pressure, leaving more room for passengers and their belongings. This new generation of containers allows a car powered by hydrogen fuel cells to travel as many miles on a single tank as a gasoline vehicle can and take about the same amount of time to refuel. That gives hydrogen fuel-cell cars a major advantage over their main electric rival, battery-powered vehicles, which have a limited range and take hours to recharge.

The obstacles to distribution are beginning to fall away, too. True, with relatively few dedicated pipelines in existence, hydrogen has yet to show up at the vast majority of gas stations. But there are promising work-arounds. Most of the developed world does have good natural gas distribution infrastructure, which could feed smaller reactors that produce hydrogen. Hydrogen could also be produced on-site through electrolysis. Both natural gas infrastructure and electrolysis production can allow fueling stations to start operating in the short run, without having to wait decades for a massive network of hydrogen pipelines to be built. Already, stations using one or the other distribution method are being installed around the world, primarily in Europe, Japan, and South Korea.

A hydrogen fuel pump
A hydrogen fuel pump nozzle at a factory of German industrial gases maker Linde in Vienna, July, 2014.  
Heinz-Peter Bader / Reuters

Finally, over the past decade, fuel cells themselves have become more efficient, durable, and inexpensive. The advancements owe in part to a Department of Energy program that, before funding was slashed, set clear milestones and proved extremely successful in moving the technology forward. As a result, estimates of what it would cost to mass-produce fuel-cell systems have decreased tremendously, from $124 per kilowatt of capacity in 2006 to $55 per kilowatt in 2014. The durability of these systems has improved dramatically as well, and they now meet the expectations of customers used to conventional automobiles.


All this progress has not remained bottled up in the lab: some hydrogen fuel-cell technology is now proving competitive in real-world applications. Pessimists used to joke that fuel cells were always two years away from making their way to the market. That adage no longer holds true. Worldwide, sales of fuel-cell units are growing every year, with the number of megawatts of capacity shipped more than doubling from 2009 to 2013.

Many of these end up in vehicles, which are already rolling off the production line. Hyundai has debuted a fuel-cell version of its Tucson crossover utility vehicle in certain parts of Asia, Europe, and the United States that have fueling stations. A three-year lease costs $499 a month with $2,999 down and comes with free hydrogen. Later this year, Toyota is expected to introduce the Mirai, with a price tag of $57,500. Other major automakers are following suit and have announced plans to introduce additional models in the near future. Today, every single major car manufacturer has some sort of fuel-cell development program or partnership in the works. To support the vehicles coming off the assembly line, in California, Asia, and Europe, new on-site fueling stations are under construction, along with expanded fueling networks. Fuel cells can even be found on ships. Since 2002, the navies of Germany and South Korea have launched submarines that are powered by a combination of diesel and fuel cells. Japan, Russia, and the United States are pursuing similar programs.

Although transportation is perhaps the most glamorous application for fuel cells, they are making inroads into a variety of other markets as well. In large part, that’s because the fuel-cell advancements in the automotive sector translate well into other markets. Of all the possible uses for fuel cells, putting them in cars entails the most challenging design requirements. Automotive fuel cells need to be small, high-powered, inexpensive, functional in all environments, and able to handle varying load demands. In addition, fuel-cell cars have to beat out some very tough competition: not just the gasoline vehicles that have dominated transportation for more than a century but also the hybrid and electric ones that are gaining market share.

A Toyota Mirai hydrogen fuel cell car at the Frankfurt Motor Show
A Toyota Mirai hydrogen fuel cell car is pictured during the media day at the Frankfurt Motor Show in Frankfurt, Germany, September, 2015.   
Kai Pfaffenbach / Reuters

One of the biggest growth areas for hydrogen has been stationary electricity generation. Fuel cells are rapidly establishing a foothold in this market, acting as a source of backup power or allowing consumers to unplug from the grid entirely. The early adopters are in Asia, where turnkey systems generating anywhere from fractions of a kilowatt to hundreds of kilowatts have been in use for years. Home-based fuel cells that generate around one kilowatt of power have taken off in Japan, where the average household’s electrical load is far smaller than that in the United States.

Fuel cells could even solve one of the electrical grid’s biggest problems: the lack of storage capacity. Without a way to store energy, utilities need to build their facilities for peak demand rather than average demand. So, for example, they construct costly power plants that get turned on only during the hottest days of the summer. The growth of renewable energy has only made things worse, because the hours when these intermittent sources generate power often do not match the hours when consumers use it most. Storage alleviates the problem.

Hydrogen may offer one of the cleanest, most efficient, and most versatile ways of storing energy. Once it is created through electrolysis, hydrogen can be stored and then used to generate electricity on demand later via a fuel cell, used to fill up fuel-cell cars, or sent elsewhere through pipelines. Recent advances in electrolysis have made this energy-storage option more attractive, but there are dozens of competing methods of storing electricity—from giant batteries to compressed air to water pumped uphill—and no clear winner has emerged.


Although commercially available hydrogen fuel cells are no longer a thing of the future, they do have a long way to go before gaining widespread adoption. Safety ranks as one of the most important challenges. Hydrogen is highly flammable and can even spontaneously ignite when exposed to just a small amount of air. A variety of industries, including food processing, steel production, and aerospace, have long used hydrogen safely. But the existing industrial safety regulations that cover its transportation, storage, and use are not yet adequate to deal with all the anticipated applications related to fuel cells. Revising those regulations is a time-consuming process that will have to involve a number of different stakeholders—government agencies, manufacturers, trade groups, and so on.

Another major barrier standing in the way of fuel cells is continually improving competition. It is almost certain that transportation will someday rely on electricity in lieu of fossil fuels and that large-scale energy-storage systems will feature in the electrical grid. But there are many promising technologies that could fill those needs. For now, hybrid and electric vehicles are simply further ahead than fuel-cell vehicles when it comes to commercial viability, and so fuel cells may have to wait their turn. The U.S. natural gas boom has also made fuel cells less attractive than other sources of energy. Although the boom has reduced the cost of hydrogen production, it has also cut the cost of conventional power sources by a commensurate amount. Until hydrogen gains a cost advantage—through market forces, taxes, or incentives—it will have difficulty gaining market share.

Then there is infrastructure. Although the technology for safe hydrogen fueling stations already exists, there simply aren’t enough of those stations yet for fuel-cell vehicles to expand their geographic reach. Some countries, including Germany, Japan, and South Korea, have plans to build more, but these are still in their infancy. The main obstacle is not cost, although government help will be needed. Most experts agree that in the long run, the lowest-cost method of distributing hydrogen will be a dedicated network of pipelines similar to the one in place for natural gas, or even a network that makes use of the existing natural gas pipelines, which would feed natural gas to endpoints where hydrogen would be produced on-site. There are also real questions about who will sell hydrogen and where the pipelines will go. In many countries, the chief problem is acquiring the land rights for building pipelines, and so they will probably be built along highways, where the government already owns the land.

Whether these challenges can be overcome depends on the cost of conventional energy, the development of battery and hybrid technology, and the political willingness to make the required regulatory changes and invest in the needed infrastructure. If the conditions are favorable, then an exciting future is on the horizon: a world in which energy is at last produced, stored, and distributed in a cost-effective manner and with greatly reduced carbon emissions. Surely, hydrogen fuel cells will not meet society’s every need anytime soon, but they will gain a real foothold.

Such a future will come courtesy of the advancements made over the past decade, many of them in American labs. Yet even though the United States remains a major player, it no longer dictates the global agenda. Asian and European governments and fuel-cell manufacturers have in large part ignored U.S. budgetary priorities and forged ahead on their own. One can debate whether all of Chu’s four miracles have truly occurred. But what is clear now is that entities outside the United States will be the ones most likely to profit from them.

You are reading a free article.

Subscribe to Foreign Affairs to get unlimited access.

  • Paywall-free reading of new articles and a century of archives
  • Unlock access to iOS/Android apps to save editions for offline reading
  • Six issues a year in print, online, and audio editions
Subscribe Now
  • MATTHEW M. MENCH is Robert M. Condra Chair of Excellence Professor and head of the Department of Mechanical, Aerospace, and Biomedical Engineering at the University of Tennessee, Knoxville.
  • More By Matthew M. Mench