What is our assessment?

Based on our analysis, green hydrogen holds long-term potential in sectors that are difficult to decarbonize, particularly long-haul aviation and freight trucking. It is technologically feasible, but currently hampered by high costs, severe infrastructure gaps, and limited commercial readiness. While it is unlikely to be deployed at scale this decade, we will “Keep Watching” green hydrogen as innovation and policy evolve

What is it?

Green hydrogen is a clean, emissions-free liquid fuel produced through electrolysis powered by renewable energy that can replace fossil fuels in some transportation sectors. Unlike hydrogen from fossil fuels (gray or blue hydrogen), green hydrogen generates no CO₂ emissions during production. For transportation, green hydrogen can be used in two main ways: (1) in fuel cell electric vehicles (FCEVs) to generate electricity onboard and power electric motors, or (2) combusted in specially designed hydrogen combustion engines or turbines. For aviation, liquid hydrogen may fuel aircraft engines directly, be used to produce synthetic jet fuels, or power fuel cell airplanes. For long-haul trucking, hydrogen can replace diesel by powering fuel cell trucks, which offer long range and fast refueling.

Does it work?

Green hydrogen is being produced and used in pilot projects and select transportation initiatives globally. Hydrogen combustion engines and fuel cells are currently in use and have been shown to reduce emissions compared to fossil fuels. For aviation, aircraft manufacturers, such as Airbus, have hydrogen-powered planes in development, with test flights expected by 2030, but it could be several decades before they are put into commercial use. In heavy-duty trucking, several major automakers, including Toyota and Hyundai, have already commercialized hydrogen trucks in limited markets, such as China and Japan.

Why are we excited?

Green hydrogen is one of the few near-zero-emission fuels with the potential to decarbonize aviation and long-haul trucking, where battery-electric solutions currently face range and weight constraints. If produced using abundant, low-cost renewables, green hydrogen could significantly cut emissions in sectors responsible for nearly 15% of global transport emissions. In aviation, hydrogen-based fuels like e-kerosene could save around five million tons of CO₂ per year in Europe by 2030. In trucking, hydrogen fuel cell vehicles are beginning to roll out but remain a niche market. Looking ahead, hydrogen has strong potential: by 2050, it could meet up to 30% of energy demand in long-haul trucking and significantly reduce aviation emissions, particularly for short- and medium-haul flights, but it will have to compete with advances in battery-electric options. Hydrogen enables fast refueling and long range, making it a strong candidate for freight and intercity applications. Additionally, investment in green hydrogen infrastructure could unlock cross-sectoral benefits, supporting decarbonization of industry, power, and potentially heating. As electrolyzer costs fall and renewable power expands, the economics and emissions profile of green hydrogen are likely to improve.

Why are we concerned?

Despite its promise, green hydrogen for transport faces significant technical, economic, and logistical hurdles. Electrolysis is energy-intensive, and green hydrogen production is still expensive (US$300–600/t CO₂ avoided for trucking and US$500–1500/t CO₂ for aviation), making it much more costly than diesel or jet fuel but comparable to sustainable aviation fuel today. It is also less energy-dense by volume than other fuels, requiring complex transportation and storage (especially for aviation, where cryogenic tanks are needed) and limiting payload capacity. In addition to producing contrails, hydrogen leakage, though not a GHG, can contribute to indirect global warming effects. There are also safety concerns related to flammability and explosiveness, and a complete overhaul of transportation and refueling infrastructure is needed for both aviation and trucking. Green hydrogen requires entirely new infrastructure for production, storage, and distribution, including refueling stations for trucks and specialized handling systems for liquid or compressed hydrogen at each airport the airplane uses. The absence of this infrastructure creates a major barrier to adoption in aviation and long-haul trucking, where fuel logistics, safety standards, and scale are critical for commercial viability. Hydrogen remains a niche fuel due to its low energy density per volume, the need for cryogenic storage in aviation, limited refueling infrastructure, and high cost. While technically viable, major deployment for aviation and trucking is still nascent. Without a clear business case or strong policy incentives, uptake will remain limited in the near term.

What is our assessment?

Based on our analysis, sustainable aviation fuel (SAF) is a promising climate mitigation solution for reducing emissions in the aviation sector, particularly for long-haul flights where few alternatives exist. However, it is not yet cost-effective and faces significant challenges to scaling production due to severe feedstock restraints, land use pressure, and the need to meet robust sustainability standards. Based on our assessment, we will “Keep Watching” this potential solution.

What is it?

Sustainable aviation fuel (SAF) is a low-carbon alternative to conventional jet fuel that reduces life-cycle greenhouse gas emissions from fuel production by using only non-petroleum feedstocks such as waste oils, agricultural residues, and municipal solid waste. It is usually produced using renewable electricity and captured CO₂. SAF is produced through chemical processes that convert these feedstocks into fuels that meet the same technical standards as fossil-based jet fuel, allowing them to be blended and used in existing aircraft engines and fueling infrastructure without modification. All SAFs approved by ASTM International, the body that sets fuel standards for aviation, are certified only for use in blends. No SAF is yet certified for 100% use in commercial aircraft (also known as “neat SAF”) for passenger flights.

Does it work?

The basic idea of sustainable aviation fuel is technologically sound and supported by decades of research into low-carbon fuel alternatives for aviation. Multiple SAF production pathways – such as hydroprocessed esters and fatty acids (HEFA), Fischer-Tropsch synthesis (FT), and alcohol-to-jet (ATJ) – have been approved by international aviation standards bodies, and several have been demonstrated at commercial scale. Real-world use of SAF is already underway: over 450,000 commercial flights have flown using SAF blends as of early 2025. SAF is currently being supplied at major airports in Europe, the United States, and Asia, with dozens of airlines integrating SAF into operations or entering offtake agreements. While current production remains limited (less than 0.5% of global jet fuel supply), government mandates, tax credits, and airline demand are driving the need for rapid scale-up. SAF is considered one of the most evidence-backed and immediately deployable climate solutions for reducing aviation emissions.

Why are we excited?

Sustainable aviation fuel offers several compelling advantages that make it a potential pathway for reducing aviation emissions. By reducing emissions 60-70% per ton compared to jet fuel, SAF could potentially avoid 0.1–0.2 Gt CO₂/yr by 2050. It can also reduce contrails. SAF can be used in existing aircraft and fueling systems without requiring new infrastructure or major redesigns. This makes it one of the few ready-to-deploy solutions for long-haul and international flights, which are difficult to electrify or replace. SAF production from waste oils and residues can also deliver benefits such as reduced methane emissions from organic waste streams and improved waste management. SAF offers a potentially scalable, technically feasible route to emissions reductions in a sector with few alternatives. Growing policy support, rising carbon prices, and airline demand are accelerating development. 

Why are we concerned?

Despite its promise, sustainable aviation fuel faces significant limitations, risks, and challenges that could constrain its impact and scalability. First, supply is a critical constraint. Due to limited feedstock availability, SAF is highly unlikely to be able to meet the ambitious 2050 goals set by ICAO, ReFuelEU Aviation, and other industry organizations, associations, and governmental institutions. This means that SAF must be combined with other strategies, like demand reduction and new aircraft technologies, to achieve full decarbonization. There are also major ecological and social risks, including competition for land and feedstocks that could displace food production or degrade ecosystems, as well as unequal access to the benefits of SAF deployment. Scaling synthetic SAF (e-fuels) requires vast amounts of clean electricity, water, and CO₂ – raising concerns about resource use and trade-offs with other sectors. Another major concern is cost. Current SAF prices are substantially higher than fossil jet fuel, ranging from US$300 to over US$1,500 per t CO₂ avoided, depending on the pathway. Without strong policy support, this cost premium poses a barrier to widespread adoption. Additionally, life-cycle emissions reductions vary widely depending on the feedstock and production pathway. While some SAFs (e.g., e-fuels using renewable electricity) can achieve near-zero emissions, others, especially those using food crops or poorly regulated waste streams, may deliver modest or uncertain climate benefits. Measurement, reporting, and verification of actual emissions reductions can be complex, especially when land-use change, indirect emissions, or supply chain impacts are involved. SAF combustion still contributes to climate impacts from contrails (albeit reduced compared to jet fuel), nitrogen oxides, and soot.