Space

The really annoying thing about hydrogen is that it's most useful once you're already in space, where the density and thrust of the fuel doesn't matter so much and insulation is generally easier. Since all our rockets so far are built and launched from Earth's surface hydrogen ends up being a thing that'd be really nice in concept but not so good in practice.

I wouldn't be terribly concerned with the environmental impact of methane rocket fuel, personally. Although currently Starbase gets is methane shipped in by trucks from elsewhere, SpaceX's ultimate goal with Starship is to land and return from Mars and they'll need to refuel on Mars for that to work. So the long-term plan for Starbase is to build a Sabatier process methane production plant powered by solar panels, much like they'll be building on Mars, to convert CO2 into methane. Once that's up and running Starship will be a carbon-neutral launch vehicle.