The struggle of the billionaires has made headlines. The world’s richest manElon Musk, has match up with Australia’s richest man, billionaire Andrew “Twiggy” Forrest.

Musk, a founding investor in battery-powered car giant Tesla, has famously mocked hydrogen fuel cell vehicles as “stunningly stupid”. Forrest has just taken a very big bet on green hydrogen through its Fortescue Future Industries company. It’s no surprise that Forrest hits back, calling Musk “just a businessman” rather than a “true climate avenger.”

The stoush may sound tabloid. But at the heart of it is a serious debate about the industrial future of the world. Battery electric cars have already proven their worth, while hydrogen fuel cell cars are still emerging. But green hydrogen isn’t a one-trick pony — it can replace fossil fuels in many high-emission industrial processes, such as steel or cement making.

Will batteries or fuel cells power the world as we accelerate towards a green future? The short answer is that we need both.

The battle for the future?

Musk and his company Tesla support battery-powered and battery-powered electric vehicles. And Musk is doing this on a colossal scale, with its large-scale gigafactories producing millions of lithium-ion battery packs to power battery-electric vehicles. Other companies such as LG and Samsung are following suit and rolling out their own giga factories.

Forrest, on the other hand, is strongly in favor of green hydrogen. To make it a reality, he is considering huge solar panels in the sun-drenched north and west of Australia to power the electrolysis process that splits water into its components, hydrogen and oxygen. In a fuel cell car, green hydrogen again combines with oxygen to generate electricity.

While Teslas and many other battery-electric cars are now seen on roads around the world, fuel cell cars have had little appeal until now. Although Japan’s Toyota and South Korean Hyundai have backed them, they are a rarity in other countries. According to Forrest, this could change if green hydrogen arrives in large quantities and costs fall.

Musk does have a point. What, he asks, is the point of producing clean energy to produce hydrogen to produce electricity to power a car? Why not just store the green power in a battery and use it right away?

While this truth could limit the use of fuel cell vehicles in the medium term, Forrest sees green hydrogen as a panacea and a long-term perspective. To speak last year, Forrest said green hydrogen could become the largest industry in the world, with revenues of AU$18.5 trillion by 2050.

How? Green hydrogen is versatile. Unlike batteries, green hydrogen can replace oil, coal and gas in almost all their applications, including as fuel in fuel cell electric vehicles. Green hydrogen can produce green steelgreen cement, green glass, green plastics and even green fertilizer (via green ammonia).

This is the real reason why green hydrogen is important. It enables total replacement of fossil fuels, as I do in my upcoming book.

How far is the total replacement?

Forrest and its green hydrogen company focus on green hydrogen as a universal alternative, rather than just fuel for vehicles.

This changes how we should look at the hydrogen battery debate. While battery-electric technology has taken a leading edge in consumer cars, batteries are far less effective at powering heavy transportation such as trucks. You need extremely heavy batteries to get sufficient range and power. In contrast, the ability to store large amounts of hydrogen means that fuel cells may be needed to power trucks, trains, boats and ships.

Giant industrial economies in the north of Australia, such as South Korea, Japan and China, increasingly see green hydrogen as a way to become decarbonised. The technique should also provide significant water savings, as the water used in electrolysis has a fraction thereof needed to make fossil fuel use viable through mining, cooling power plants and fracking for gas or oil.

While these countries can produce some of their own green hydrogen using water, sun and wind, they will likely also look for foreign suppliers such as Australia, given our vast solar and wind resources.

But there are cost and scale challenges to overcome, especially the cost of electrolysers. Recent research suggests that this bottleneck is significant, but can be overcome with government and business support.

Costs should fall rapidly in the coming years. By the end of this year, the world will have its first gigawatt of electrolysis capacity. According to a new Report from the International Energy Agency, it could be between 134 and 200 gigawatts of capacity if all planned projects go ahead. From 2021 38 gigawatts of power were planned in Australia. Some of these, of course, don’t go through. But many will.

Green hydrogen is not a direct competitor to light battery-electric cars. It’s complementary – and it will open many new, much-needed paths to net zero in hard-to-decarbonize sectors. So Musk is wrong about hydrogen. But he’s right about batteries – we’ll need them too.

For our part, Australia has everything to gain from accelerating the industrial future of green hydrogen. It is very possible that we could have a huge export industry to catch up with if coal, oil and gas decline. And we will also benefit from our rich deposits of minerals needed in batteries.

• John MathewsProfessor Emeritus, Macquarie Business School, Macquarie University

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