Even with the backing of one of the biggest car companies on the planet, Toyota Motor Corp. (TM), hydrogen fuel is still lagging far behind electric vehicles. This result is driven by a number of interconnected issues. Yet perhaps the most serious challenge for hydrogen-based power is the prohibitive cost associated with the technology.

Current hydrogen production methods are mostly not commercially viable. The most cost-efficient method for creating hydrogen used in industrial applications including fuel cells is steam hydrocarbon reforming. This is a process where natural gas is treated with high temperature steam which in turn causes a chemical breakdown of the natural gas releasing hydrogen. Obviously, this is not very green since natural gas is used, and it’s costly due to the poor efficiency of the process.

Other methods start with the gasification of low sulfur coal in an industrial furnace, and then chemically scrub the gas to extract hydrogen, along with carbon monoxide and carbon dioxide. These methods are reasonably effective for producing hydrogen at an acceptable price for use in industrial manufacturing, but they are not even close to cost competitive with gasoline or natural gas given energy production/cost trade-offs. Electrolysis can also be used to produce very pure hydrogen based on using electricity to chemically decompose water into hydrogen and oxygen. The problem here is that the method is very energy intensive and can end up using more energy than is actually created.

Recently, a novel approach to the issue of hydrogen production has emerged out of Germany. Hydrogen can be extracted from many molecules, and one of these molecules is methane (CH4). Methane can be “cracked” using high temperatures to break the molecule down into its component parts of hydrogen and carbon. The German team built a reactor device which successfully cracked methane at temperatures of around 1200 degrees Celsius and showed a 78 percent conversion rate for hydrogen production over a two-week trial period.

This is a very big accomplishment. Methane cracking has been around for a while now, but it has never been a very useful technology for producing hydrogen because of low conversion rates and problems with most reactors. If the new reactor design can consistently improve the efficacy of hydrogen production from methane cracking, it’s likely that industrial hydrogen companies would take notice quickly. In addition, depending on the costs of input feedstock, and the conversion efficiency in large scale production, it could lead to the first viable production of cost effective hydrogen for transportation uses.

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The German team showed that “methane cracking could achieve costs of 1.9 to 3.3 euros per kilogram of hydrogen at current German natural gas prices.” In the U.S., that price would likely be even lower, but the key is to make sure that the new reactor works reliably and consistently over time.

If the reactor runs into problems too often and maintenance issues start to crop up (like carbon clogging), then the technology won’t get past the starting gate. Methane cracking is a much greener technology approach than current standards like steam methane reforming or alternative methods of generating hydrogen. The new reactor then could be a very big deal from an environmental standpoint. There are a number of unanswered questions still remaining, but the most important one is can this trial be replicated by other facilities elsewhere in the world.

This piece originally appeared on Oilprice.com.