Why can the reaction between sodium and water create a fire hazard?

The reaction between sodium and water creates a fire hazard primarily because it is a highly exothermic process that releases flammable hydrogen gas.12

When sodium comes into contact with liquid water, an oxidation-reduction reaction occurs, transferring electrons from the sodium atoms to the water molecules. This reaction generates significant heat and produces hydrogen gas, which can ignite. The explosive hazards associated with this interaction are linked specifically to the rapid formation of this hydrogen gas.21

Because the reaction is so intense, it is critical to handle sodium with extreme care. Furthermore, because sodium reacts with carbon dioxide, standard fire extinguishers are ineffective; specialized dry-powder extinguishers are required to manage fires involving this metal.1