Hydrogen has long been positioned as a cornerstone of the net zero transition. From green steel and chemicals to long-haul transport and grid balancing, governments and investors are pouring billions into hydrogen production, storage and fuel cell technologies. But new research from Heriot-Watt University warns that a critical weakness threatens to derail this momentum: hydrogen distribution is lagging dangerously behind.

A study from Edinburgh Business School at Heriot-Watt University, published in the journal Sustainable Futures, finds that while hydrogen production and utilisation technologies are advancing rapidly, the infrastructure needed to transport hydrogen is developing at roughly half the pace. The result is a growing bottleneck that could undermine the commercial viability of hydrogen systems and put global net zero ambitions at risk.

A system out of balance

The research analysed an unprecedented dataset of 777,000 hydrogen-related patents and 1.3 million citations spanning 182 years of technological development. The findings reveal a stark imbalance across the hydrogen value chain.

Production methods such as electrolysis, storage technologies, and end-use applications like fuel cells show strong and accelerating innovation trajectories. Costs are falling, efficiency is improving and deployment is expanding. Distribution, however — including pipelines, terminals, compression and liquefaction — is progressing far more slowly.

Dr David Dekker, Research Fellow at Edinburgh Business School and lead author of the study, says this imbalance is structural rather than accidental.

“Distribution will become the dominant cost in any hydrogen system,” he explains. “Even as we get better at producing and using hydrogen, getting it where it’s needed stays expensive.”

As hydrogen scales, transport costs could consume an increasingly large share of total system budgets, squeezing margins and weakening the business case for adoption across industry and energy markets.

Capital intensity and closed innovation

Unlike production technologies, which benefit from modular designs and fast-moving innovation ecosystems, hydrogen distribution relies on large, capital-intensive infrastructure. Pipelines, liquefaction plants and storage terminals require billions in upfront investment, complex permitting and rigorous safety oversight.

“Safety regulations and permitting processes are complex, so progress is slow,” says Dr Dekker. “But there’s also a knowledge problem.”

The study highlights that hydrogen distribution innovation is concentrated among a small number of major infrastructure players. These firms tend to protect intellectual property closely, sharing far less knowledge than innovators in other hydrogen fields.

“In capital-intensive sectors where competitive advantage matters, companies are far less likely to publish innovations openly,” Dr Dekker notes. “That slows progress across the entire sector.”

This contrasts sharply with areas such as electrolyser development, where academic-industry collaboration and open research have accelerated learning curves and driven down costs.

Why distribution matters more than ever

Hydrogen distribution is not just another link in the value chain — it is the connective tissue that enables the entire hydrogen economy to function.

Without affordable and scalable transport, hydrogen production remains geographically constrained, tied to locations near renewable power sources or industrial hubs. That limits uptake across the wider economy, from heavy industry to transport and power systems.

Professor Dimitris Christopoulos, Director of Research at Edinburgh Business School and co-author of the study, warns that this could undermine climate commitments.

“We cannot have a hydrogen economy without the infrastructure to move it around,” he says. “Right now, that is the fundamental missing piece.”

The stakes are high. The 2015 Paris Agreement requires rapid deployment of low-carbon technologies across all sectors. If hydrogen distribution remains underdeveloped, major investment programmes risk delivering stranded assets — world-class production capacity with no viable way to reach customers.

The chicken-and-egg problem

The findings echo concerns already emerging in leading hydrogen markets. As Professor Mercedes Maroto-Valer, Director of the UK Industrial Decarbonisation Research and Innovation Centre (IDRIC), points out, hydrogen faces a familiar infrastructure dilemma.

“Hydrogen faces a classic chicken-and-egg problem,” she says. “Industry won’t commit at scale without pipelines, terminals and reliable delivery, but those networks won’t be built without firm industrial demand.”

What the Heriot-Watt research adds is hard empirical evidence that distribution innovation is systematically lagging behind the rest of the hydrogen system. Without targeted intervention, this gap is unlikely to close on its own.

Implications for business and investors

For businesses betting on hydrogen — whether as producers, users or investors — the message is clear: distribution risk is now a central strategic issue.

Companies planning hydrogen-based operations may face higher-than-expected costs, limited geographic reach and long delays in infrastructure availability. For investors, distribution bottlenecks could reduce returns on otherwise attractive production or end-use projects.

This also raises questions about the sequencing of hydrogen deployment. Pouring capital into production without parallel investment in transport risks creating a fragmented system that fails to scale.

What needs to change

The researchers argue that overcoming the distribution bottleneck will require deliberate policy and market interventions, not just incremental technological progress.

Key measures include:

• Targeted public investment to de-risk early-stage hydrogen pipelines, terminals and liquefaction facilities.
• Incentives for knowledge sharing, including collaborative R&D programmes and pre-competitive research platforms.
• Open technical standards to reduce fragmentation and speed up deployment.
• Publicly backed demonstration projects that prove distribution models at scale and crowd in private capital.

Without these interventions, hydrogen risks becoming a niche solution rather than the system-wide decarbonisation tool policymakers envision.

A narrowing window

Hydrogen remains a powerful opportunity for decarbonising hard-to-abate sectors, but the clock is ticking. As Professor Christopoulos warns, the question is no longer whether hydrogen technologies work — but whether the infrastructure can keep up.

“If distribution costs make hydrogen uncompetitive, the opportunity will be lost,” he says.

For governments, industry and investors alike, the message from Heriot-Watt University is stark: fix the distribution bottleneck now — or risk watching billions in clean energy investment stall before it delivers real climate impact.