U.S. Blue Hydrogen, Similar Projects Face Wave of Setbacks

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Written by Will Ploch, Assistant Editor-in-Chief for IIR News Intelligence (Sugar Land, Texas)

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Summary

The U.S. market for low-carbon (or "blue") hydrogen, ammonia and methanol has dried up, with rising costs, mounting delays, weak demand and opposition from the Trump administration creating a perfect storm for companies like Air Products and ExxonMobil, which have axed or indefinitely delayed projects.

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Industry Faces the 'Blues'

Air Products and Chemicals Incorporated recently announced it would end development of a massive, ambitious low-carbon hydrogen project in Louisiana, the latest in a string of cancellations and delays plaguing the U.S. market for the "blue" production of hydrogen and other chemicals. Industrial Info Resources is tracking more than $45 billion worth of active and proposed projects across the U.S. for blue hydrogen, ammonia or methanol, about two-thirds of which is attributed to projects Industrial Info believes has a low probability (69% or less) of beginning construction as currently planned.

According to Industrial Info Resources data, 750 million standard cubic feet per day of blue hydrogen was to be produced at Air Products' Louisiana Clean Energy Complex in Geismar, Louisiana, with the resulting carbon dioxide (CO2) to be sequestered under Lake Maurepas, which is just to the west of Lake Pontchartrain on the Gulf Coast. Most of the blue hydrogen would have been sent to the Gulf Coast hydrogen pipeline network, with the remainder used in the production of blue ammonia.

Cost estimates for the project ranged as high as $9 billion, and Air Products acknowledged it would write off $2.9 billion in losses. U.S. demand for low-carbon hydrogen has weakened in recent years, and a recent change in leadership at Air Products shifted the company's focus back to its core gas business. Executives at Air Products expect to see an increase in industrial gas demand from data centers and semiconductor-production projects, among other factors.

Air Products also announced it would cancel a "green" hydrogen project in Casa Grande, Arizona, which would have produced hydrogen via a carbon-free--but costly and complicated--process. Industrial Info Resources offers more information on these developments in its Global Market Intelligence (GMI) Chemical Processing Plant and Project databases, where readers can find details--including construction schedules, investment values and necessary equipment--in reports on the Geismar and Casa Grande projects.

Other major projects to be halted within the past year include Exxon Mobil Corporation's complex in Baytown, Texas, which was designed to produce 1 billion cubic feet per day of blue hydrogen and ammonia via a carbon-capture and storage system devised by Honeywell. The Baytown project would have stored up to 10 million metric tons per year of CO2. The project was hobbled by the Trump administration, which pulled federal funding for low-carbon projects passed by the Biden administration; Darren Woods, the chief executive officer of ExxonMobil, acknowledged in January that not enough of the project's potential buyers were willing to pay the higher premiums for off-take.

ExxonMobil's project already was facing serious doubts before the Trump administration's decision, as costs escalated and delays mounted. Readers can learn more from a detailed project report.

By the Numbers

• More than $45 billion: Total value of active and proposed U.S. projects for blue hydrogen, ammonia or methanol
• 65%: Share of these projects Industrial Info believes have a low probability of beginning construction as currently planned
• $9 billion: High-end estimated cost for Air Products' now-cancelled low-carbon hydrogen project in Louisiana

Some Growth Around Fertilizers

A small number of low-carbon hydrogen and ammonia projects are moving forward. Philbro LLC's Wabash Low-Carbon Ammonia Project in West Terre Haute, Indiana, started construction in January and is designed to produce 500,000 tons per year of blue ammonia for the fertilizer market. It also is expected to sequester up to 1.65 million metric tons per year of CO2.

The need for ammonia--low-carbon and otherwise--has been bolstered by the ongoing conflict between the U.S. and Iran, which has halted exports and tied up activity around the Strait of Hormuz, through which roughly 30% of the global fertilizer trade passes. Readers can learn more about the West Terre Haute development in a detailed project report, and can read more about the rocky market conditions in Industrial Info's April 29, 2026, article - U.S. Chemical Investments Shift Amid Fertilizer Crisis.

Other projects in the blue sector have seen their timelines pushed back, but remain viable. Industrial Info Resources also offers a full list of reports for active and proposed projects across the U.S. for blue hydrogen, ammonia or methanol.

The Industrial Info Resources GMI Project and Plant databases offer a full list of detailed reports for projects mentioned in this article, and a full list of related plant profiles.

Key Takeaways

• The U.S. market for the "blue" production of hydrogen and other chemicals is facing its toughest headwinds.
• Air Products and ExxonMobil are among the companies that have cancelled or indefinitely delayed projects.
• The ongoing conflict between the U.S. and Iran is driving demand for fertilizer-related chemicals, blue and otherwise.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news, and analysis on the industrial process, manufacturing, and energy-related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified, and verified plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).