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Released September 11, 2025 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Despite several delays and cancellations in the rollout of clean hydrogen projects, in its inaugural Global Hydrogen Compass report, the Hydrogen Council (Brussels, Belgium) noted US$110 billion in committed investments for clean hydrogen projects throughout the world. However, as the early-stage optimism surrounding green hydrogen production fades into the harsher realities of high production costs, unsupportive government policies and weaker end markets, the group may have reason to be less optimistic about the burgeoning technology as time passes.
A summary of the Hydrogen Council's report notes the very specific number of 50 clean hydrogen projects that have been cancelled in the past 18 months, "representing about 3% of the total pipeline; most of them early-stage renewable hydrogen ventures." However, the continued cancellation of several high-profile projects, including clean hydrogen projects intended to supply secondary sectors such as plastics production and cement manufacturing, as well as unclear government policies, may lead the council to be slightly less optimistic in future reports. The agency currently notes total committed clean hydrogen capacity throughout the world is 6 million tons per annum (MTPA), including 1 million MTPA already in operation. On the demand side, the Hydrogen Council reports about 3.6 MTPA of binding offtake and suggests that this potentially could more than double over the next five years, reaching up to 8 MTPA of demand by 2030. However, a look at on-the-ground realities suggests a less rosy picture.
The U.S. provides ample grounds to discuss a perhaps gloomier outlook for clean hydrogen as one examines how support and policies have radically shifted between the Biden and second Trump administrations. The Biden administration designated $7 billion for a series of seven "hydrogen hubs" that included multiple production and storage facilities, which was then followed by the Inflation Reduction Act, which set a lucrative tax credit of $3 per kilogram of green hydrogen produced for up to 10 years. Now, the Trump administration has begun reexamining funding allocations for some of the hydrogen hubs, shortened the time available to achieve the hydrogen tax credit and clawed back funding previously allocated for specific projects.
Earlier this year, the Department of Energy was targeting cuts to four of the seven planned hydrogen hubs, located in the Midwest, Pacific Northwest, California and mid-Atlantic. At the time, the administration said it planned to preserve funding for hubs in Appalachia, the Gulf Coast and upper Midwest, prompting some critics to note that withdrawals were targeting primarily blue regions, while the untouched hubs were in Republican-leaning red areas.
While the administration seems not to have taken direct action yet against the hubs themselves, its has significantly shortened availability of the 10-year, $3-per-kilogram tax credit available to developers. While the Biden administration allowed projects to start construction by 2033 to receive the credit, the One Big, Beautiful Bill Act shortened this timeline to the end of 2027. While the hydrogen sector expressed some consolation that the allocated time was more generous than previous proposals calling for eligibility to be terminated after 2025, the bill undoubtedly will result in cancellations of projects planned along longer timelines. Of the $37.4 in active U.S. Power-to-X projects being tracked by Industrial Info, which includes downstream products such as green ammonia and e-methanol in addition to green hydrogen, about $6.4 billion worth are planned to kick off after January 1, 2028, while many of the projects on quicker timelines will undoubtedly experience problems with equipment delays and funding that could move their construction to a later date, potentially losing the valuable tax breaks and rendering the project's economics unsound.
While the funding pullbacks are doing the industry no favors, the prevailing support and strategies of governments also have a significant influence on projects. Earlier this year, citing a "shift in policy priorities away from green energy" in the U.S., Australian miner Fortescue (Perth) cancelled plans for an 11,000-ton-year green hydrogen production facility in Arizona. Subscribers to Industrial Info's Global Market Intelligence (GMI) Chemical Processing Project Database can learn more by viewing the project report.
Other U.S. clean hydrogen projects added to the chopping block include Air Products and Chemicals Incorporated's (Allentown, Pennsylvania) planned plant in Massena, New York, because the existing hydropower the facility would have used rendered the project ineligible for the tax credit (see project report), and months before hydrogen funding began getting axed, Hy Stor Energy (Jackson, Mississippi) cancelled a $3 billion project in Mississippi that was part of the Gulf Coast Hydrogen Hub, citing broader market conditions. (See project report.)
While the Hydrogen Council suggests that green hydrogen demand could reach 8 MTPA by 2030, potential suppliers seem to be coming to the conclusion that the demand for clean hydrogen simply isn't there, which probably comes down to a matter of production costs. For use as a power source, in most parts of the world natural gas is much more cost-competitive than green hydrogen produced with renewable energy or blue hydrogen made using carbon-capture technologies. Cost estimates suggest that green hydrogen currently ranges between six and 14 times the price of natural gas.
While many power developers in the U.S. and other locations are utilizing turbines capable of firing both natural gas and hydrogen, the use of hydrogen at these facilities remains a future goal rather than a current implementation, as although hydrogen produces less emissions, its use would add substantially to the cost of generation, potentially increasing costs to ratepayers, which utilities try to avoid.
In essence, high production costs and the slower-than-expected emergence of end-user demand and cost parity with other fuel sources present the greatest challenges to clean hydrogen, and industry groups such as the Hydrogen Council may have to start reining in their optimistic outlooks for near-term future, which the actual industrial players--the green-hydrogen producers, the electric utilities and fuel suppliers--already have begun doing since the heady optimism of clean hydrogen's early days gives way to the more practical issues of project rationalization and economics.
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 validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
A summary of the Hydrogen Council's report notes the very specific number of 50 clean hydrogen projects that have been cancelled in the past 18 months, "representing about 3% of the total pipeline; most of them early-stage renewable hydrogen ventures." However, the continued cancellation of several high-profile projects, including clean hydrogen projects intended to supply secondary sectors such as plastics production and cement manufacturing, as well as unclear government policies, may lead the council to be slightly less optimistic in future reports. The agency currently notes total committed clean hydrogen capacity throughout the world is 6 million tons per annum (MTPA), including 1 million MTPA already in operation. On the demand side, the Hydrogen Council reports about 3.6 MTPA of binding offtake and suggests that this potentially could more than double over the next five years, reaching up to 8 MTPA of demand by 2030. However, a look at on-the-ground realities suggests a less rosy picture.
The U.S. provides ample grounds to discuss a perhaps gloomier outlook for clean hydrogen as one examines how support and policies have radically shifted between the Biden and second Trump administrations. The Biden administration designated $7 billion for a series of seven "hydrogen hubs" that included multiple production and storage facilities, which was then followed by the Inflation Reduction Act, which set a lucrative tax credit of $3 per kilogram of green hydrogen produced for up to 10 years. Now, the Trump administration has begun reexamining funding allocations for some of the hydrogen hubs, shortened the time available to achieve the hydrogen tax credit and clawed back funding previously allocated for specific projects.
Earlier this year, the Department of Energy was targeting cuts to four of the seven planned hydrogen hubs, located in the Midwest, Pacific Northwest, California and mid-Atlantic. At the time, the administration said it planned to preserve funding for hubs in Appalachia, the Gulf Coast and upper Midwest, prompting some critics to note that withdrawals were targeting primarily blue regions, while the untouched hubs were in Republican-leaning red areas.
While the administration seems not to have taken direct action yet against the hubs themselves, its has significantly shortened availability of the 10-year, $3-per-kilogram tax credit available to developers. While the Biden administration allowed projects to start construction by 2033 to receive the credit, the One Big, Beautiful Bill Act shortened this timeline to the end of 2027. While the hydrogen sector expressed some consolation that the allocated time was more generous than previous proposals calling for eligibility to be terminated after 2025, the bill undoubtedly will result in cancellations of projects planned along longer timelines. Of the $37.4 in active U.S. Power-to-X projects being tracked by Industrial Info, which includes downstream products such as green ammonia and e-methanol in addition to green hydrogen, about $6.4 billion worth are planned to kick off after January 1, 2028, while many of the projects on quicker timelines will undoubtedly experience problems with equipment delays and funding that could move their construction to a later date, potentially losing the valuable tax breaks and rendering the project's economics unsound.
While the funding pullbacks are doing the industry no favors, the prevailing support and strategies of governments also have a significant influence on projects. Earlier this year, citing a "shift in policy priorities away from green energy" in the U.S., Australian miner Fortescue (Perth) cancelled plans for an 11,000-ton-year green hydrogen production facility in Arizona. Subscribers to Industrial Info's Global Market Intelligence (GMI) Chemical Processing Project Database can learn more by viewing the project report.
Other U.S. clean hydrogen projects added to the chopping block include Air Products and Chemicals Incorporated's (Allentown, Pennsylvania) planned plant in Massena, New York, because the existing hydropower the facility would have used rendered the project ineligible for the tax credit (see project report), and months before hydrogen funding began getting axed, Hy Stor Energy (Jackson, Mississippi) cancelled a $3 billion project in Mississippi that was part of the Gulf Coast Hydrogen Hub, citing broader market conditions. (See project report.)
While the Hydrogen Council suggests that green hydrogen demand could reach 8 MTPA by 2030, potential suppliers seem to be coming to the conclusion that the demand for clean hydrogen simply isn't there, which probably comes down to a matter of production costs. For use as a power source, in most parts of the world natural gas is much more cost-competitive than green hydrogen produced with renewable energy or blue hydrogen made using carbon-capture technologies. Cost estimates suggest that green hydrogen currently ranges between six and 14 times the price of natural gas.
While many power developers in the U.S. and other locations are utilizing turbines capable of firing both natural gas and hydrogen, the use of hydrogen at these facilities remains a future goal rather than a current implementation, as although hydrogen produces less emissions, its use would add substantially to the cost of generation, potentially increasing costs to ratepayers, which utilities try to avoid.
In essence, high production costs and the slower-than-expected emergence of end-user demand and cost parity with other fuel sources present the greatest challenges to clean hydrogen, and industry groups such as the Hydrogen Council may have to start reining in their optimistic outlooks for near-term future, which the actual industrial players--the green-hydrogen producers, the electric utilities and fuel suppliers--already have begun doing since the heady optimism of clean hydrogen's early days gives way to the more practical issues of project rationalization and economics.
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 validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
