Burckhardt Compression Holding AG
Burckhardt Compression Holding AG
10/31/2025 | Press release | Archived content
The hydrogen economy: Key factors driving hydrogen production costs
In our previous article, we introduced the hydrogen color spectrum and compared the levelized cost of hydrogen (LCOH) for green, blue, and turquoise production in the US and Europe. We saw how regional conditions create vastly different economic outcomes, but a simple cost snapshot only tells part of the story. To make sound, long-term investment decisions, we must look deeper at the fundamental success factors that drives the investments viability. The "best" hydrogen production method is not universal; it is a strategic choice determined by a region's unique resources, energy landscape, and policy environment.
A unified view of key metrics
To understand the trade-offs, we must compare these production pathways across the same critical metrics. The following table, based on our analysis, summarizes the key inputs and outputs for producing one kilogram of hydrogen.
| Comparison metric | CH4 SMR (Blue hydrogen) | H2O Electrolysis (Green hydrogen) | CH4 Pyrolysis (Turquoise hydrogen) |
| Methane consumption (kg CH4/kg H2) | ~5.6 | / | ~4 |
| Energy consumption (kWh/kg H2) | Included within the Methane consumption | ~55 | ~10 |
| CO2 Emissions (kg CO2/kg H2) | ~10 (before capture) | 0 | ~0 |
| Water consumption (kg H2O/kg H2) | 6 - 13 | ~10 | 0 |
| Technology maturity | High | Medium | Low |
| Revenue streams / Products | H2 | H2 | H2, solid carbon (CO2 certificates) |
To better visualize these trade-offs, the data can be represented as unique profiles. As the chart below shows, there is no single method that is superior on all metrics; each has a distinct shape of advantages and disadvantages.
This visual comparison leads us to the critical factors driving a project's viability.
Interpreting the data: What these factors mean in practice
This data reveals the critical trade-offs that every project developer must consider.
Energy consumption
The most striking difference is in energy demand. Green hydrogen via electrolysis requires approximately 5.5 times more electricity than turquoise hydrogen from pyrolysis. In a world of growing electrification and strained grids, this massive energy requirement is a significant challenge for green hydrogen, directly competing with other demands like electric vehicles and heating.
Water consumption
Both steam methane reforming (SMR) and electrolysis are water-intensive processes. Methane pyrolysis, in contrast, requires no water feedstock, giving it a powerful advantage in arid regions where water is a scarce and valuable resource often contested by agriculture and municipalities.
Feedstock and infrastructure
Blue and turquoise hydrogen leverage methane from existing natural gas pipelines, LNG import terminals, or biogas facilities. This ability to use mature, existing infrastructure is a major advantage for scaling quickly and cost-effectively compared to building entirely new ecosystems. Especially if sufficient green power for green hydrogen electrolysis cannot be provided both paths, the blue and the turquoise may turn out to be a viable vector of hydrogen production.
Applying the factors: Which hydrogen path for which region?
Understanding these factors allows us to move from theory to strategy. The optimal production path becomes clear when viewed through a logical decision-making framework based on a region's unique strengths and constraints.
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As the decision tree illustrates, the ideal pathway depends on a series of key local conditions.
The case for green hydrogen (Electrolysis)
This is the solution of choice in regions with a surplus of low-cost, renewable energy and abundant fresh water. Locations like Norway and Quebec, with vast hydropower resources, or future solar hubs are ideal candidates for large-scale green hydrogen production.
The case for blue hydrogen (SMR with CCUS)
This path is most competitive in regions with both low-cost natural gas and accessible geological formations for CO₂ storage. The US Gulf Coast and Middle East is a prime example, with its abundant gas reserves and nearby depleted oil and gas wells perfect for cost-effective carbon sequestration.
The case for turquoise hydrogen (Methane Pyrolysis)
This innovative method finds its niche in regions that have access to methane at reasonable costs but face constraints on water, renewable energy, or both. It is also uniquely suited for areas with local industries that can use the solid carbon byproduct, such as tire or battery manufacturing, creating a circular, value-added economy.
Unlock your hydrogen applications with our advanced solutions
This analysis shows that the future of hydrogen will not be defined by a single color, but by a diverse mix of production methods tailored to regional strengths. Whether hydrogen is produced from water, captured from a reformer, or separated through pyrolysis, the next step in conditioning the hydrogen for downstream use is compression. This initial pressurization is the gateway to the entire hydrogen value chain, where it is compressed to high pressures for efficient storage, transport, and delivery to the end-user.
As the hydrogen economy scales, safe and efficient compression technology will be the backbone that enables its growth, minimizing operational costs and maximizing the profitability of hydrogen projects worldwide.
To learn more, visit our webpage below, where we showcase key applications in which our expertise and engineered solutions support efficient, reliable, and scalable hydrogen mobility and energy systems.
Hydrogen mobility and energy
Next in "The hydrogen economy" series
In the next article of this series, we will examine hydrogen's physical journey through the midstream, focusing on the technologies and strategies behind its packaging, transport, and storage.
- Hydrogen mobility and energy
- White Papers
Burckhardt Compression Holding AG published this content on October 31, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on November 05, 2025 at 08:22 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]