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The term 'hydrogen economy' refers to the use of hydrogen (H2) in replacement of fossil fuels to support the energy needs in society. Hydrogen was chosen because it burns cleanly and unlike fossil fuel, it does not add pollution to the environment nor does it cause oil spill. The benefits of using hydrogen are so great whereas the environmental concerns with fossil fuel are so serious, so hydrogen economy is likely favourable as the fuel of the future. Now the big question with hydrogen economy is how much energy is required in producing, packaging, handling, storing and transporting hydrogen?
Producing hydrogen is significantly challenging. It cannot be obtained just by pumping it from the ground. One of the most common methods of producing hydrogen is by steam-methane reforming. The process involves reacting methane (CH4) with steam (H2O) using nickel (Ni) as catalyst, producing hydrogen, carbon monoxide (CO) and a small amount of carbon dioxide (CO2). Carbon monoxide then reacts with steam to form carbon dioxide and more hydrogen. Partial oxidation is another method of producing hydrogen. In this process, methane reacts with limited amount of oxygen to form carbon monoxide and a small amount of hydrogen. Only limited amount of oxygen is used so that complete oxidation of the hydrocarbon cannot occur which could result in the formation of carbon dioxide and water instead. Furthermore, carbon monoxide reacts with water to form carbon dioxide and more hydrogen.  These two methods may reduce pollution but not only do they not eliminate greenhouse gases, they may also cause fossil fuel depletion.
Another method of producing hydrogen is by electrolysis of water which involves the breaking of water molecules into oxygen gas and hydrogen gas when electricity passes through the cathode and anode in the water, often with catalyst present. This method does not produce any greenhouse gases but it is expensive to run on large scale since a large amount of electricity will be required.  Hydrogen can also be produced from biomass, such as energy crops, agricultural residues and waste, forestry waste and residues and industrial and municipal waste using thermochemical process or biological process. Thermochemical process involves combustion, pyrolysis, liquefaction and gasification. Whereas biological process involves direct biophotosis, indirect biophotosis, biological water-gas shift reaction, photo-fermentation and dark fermentation.  Biomass is renewable and it does not emit carbon dioxide to the environment due to the photosynthesis of green plant.
Moreover, hydrogen storage is another big problem. Up to half of the storage capacity is often lost. Hydrogen gas has a density of 0.085kg/m3  so a large tank is required to store. Alternatively, hydrogen gas can be compressed (i.e. by increasing the pressure) to reduce the volume but a lot of energy is required to run the compressor. Also, high pressure is used, so a very strong tank is needed to store the compressed hydrogen gas. Hydrogen can also be liquefied at -252.8oC  resulting the density to become 70.973kg/m3.  However, a large amount of energy is needed to achieve this low temperature and the tank has to be properly insulated to prevent the loss of hydrogen due to its low boiling point. Although liquid hydrogen tank is rather light, insulation for the tank is quite expensive.
Another way is by using ammonia (NH3) as hydrogen storage. Ammonia decomposes into nitrogen (N2) and hydrogen at temperature above 300oC with the presence of a nickel-alumina catalyst. One of the advantages of using this method is that ammonia has a high hydrogen density compared to the other hydrogen storage materials. It can also be stored at room temperature as aqueous ammonia. Ammonia is one of the most commonly produced and used chemicals in industries. Hence, very well developed technologies have already existed and widely been used to make it. The hydrogen used to synthesise it may come from steam-methane reforming or from coal by gasification. Coal for hydrogen production is cheaper compare to using methane but the coal reserves may get exhausted if no other alternative is used. This whole process does not produce carbon dioxide gas as the end product. However, there may be a trace of ammonia in hydrogen after the decomposition. Ammonia is a toxic gas and has a very unpleasant smell. Apart from that, lot of energy is required to make it. 
There is no cheap way of producing hydrogen and also, there is no good and easy of storing and transporting it but that does not mean that the idea of hydrogen technology does not work. Even Iceland has been noted as the future of hydrogen economy.  The most obvious step we will see is the marketing of fuel cell vehicles because fuel cells provide two significant improvements over the internal combustion engine (ICE); they are about twice as efficient and they can reduce air pollution in the cities.
Hydrogen can be used in a fuel cell to provide electricity and heat. A fuel cell works similarly as a battery often with hydrogen as the "fuel". Some use methane or methanol as the fuel. A fuel cell contains two electrodes surrounding by electrolytes; hydrogen goes into the anode and oxygen enters through the cathode. It generates electricity and produces heat without the need of charging and it does not run down, unlike battery, as long as there is enough supply of fuel and oxygen which usually comes from the air. The only byproduct is water. 
For transportation, hydrogen burns in an internal combustion engine, in similar way as petrol or natural gas. Water is the main byproduct, however, of oxides of nitrogen is also produced in small amount. Dual fuel ICE vehicles have also been produced which can run on both hydrogen and petrol, both stored in the same common tank. BMW currently supports this technology.  Hydrogen can also be used to power fuel cell vehicles. This has efficiencies of up to 45%, compared with up to 25% for a dual fuel ICE. Therefore the same amount of hydrogen can make a fuel cell car to travel about twice the distance a dual fuel ICE car makes. 
An advantage of using a hydrogen vehicle is that if it were involved in an accident in an open space, there would be less risk than with a petrol vehicle. This is because hydrogen is very light, and so any leak would dissipate rapidly into the air, hence this reduces the risk of fire or explosion. Hydrogen gas is not toxic and it is also not a pollutant, so it does not cause any damage to the environment. Apart from that, hydrogen storage tanks are stronger than petrol tanks, and they are less likely to cause a large leak. In a poor ventilated space however, hydrogen could cause fire or explosion when mixing with air. But the fire would burn out quickly as the hydrogen dissipated and hydrogen only burns if there is a presence of radiation of heat. Since hydrogen is colourless and also odourless, sensors would be required to detect any leakage of hydrogen, for example, by putting hydrogen sensors in a closed space such as the garage or the basement parking lot. 
Public awareness of the benefits of using hydrogen has been raised. Demonstration projects which involve the use of hydrogen in public transportations and buildings are well accepted elsewhere in the world and this is considered to be one of the best ways of bringing the technology to the public's attention. Hydrogen is widely considered as the fuel of the future because it has a strong potential for use in future's energy systems and meeting climate change. Hydrogen technology is well established in the industry and further commercialisation for vehicles and stationary uses is expected in the next few years. On-going research is conducted, demonstration projects have been called and many strategies have been made for future development.