Despite recent delays and cancelations of projects, the clean hydrogen industry has surpassed $110 billion in investment in more than 500 projects that have moved past the final investment decision, a new report by the Hydrogen Council showed on Tuesday.
Investments in clean hydrogen projects have increased by $35 billion since last year to top a total of $110 billion so far. The money is being poured into more than 500 projects worldwide that are past final investment decision (FID), in construction, or already operational, according to the Hydrogen Council’s first Global Hydrogen Compass report, co-authored with McKinsey & Company.
“This progress is accompanied by natural attrition, as projects with the strongest business cases advance and less viable ones are withdrawn, demonstrating continued maturation across the industry,” the Hydrogen Council said.
The lobby group acknowledged that about 50 projects have been publicly cancelled in the past 18 months, representing about 3% of the total pipeline since 2020.
“Structural challenges, including persistently high interest rates and delayed policy implementation in some regions, are adding pressure to this selection process,” the Hydrogen Council said, noting that the industry now needs firm demand for supply to thrive.
This, according to the Council, needs strong policy support.
The report “shows we are now at a pivotal juncture: accelerating market creation and securing binding offtake agreements must become the priority to ensure today’s projects deliver real impact,” said Sanjiv Lamba, CEO of Linde and Co-Chair of the Hydrogen Council.
“Achieving this will require stronger collaboration between business and government to build the frameworks and partnerships essential for progress.”
The council defied a gloomy outlook of the industry that has been hobbled by numerous challenges in recent years.
The green hydrogen drive is losing momentum as start-ups face rising costs and uncertain demand while energy majors back out of multi-billion-dollar projects as they return to their core oil and gas business.
Despite the promises of zero emissions in green hydrogen use and the environmentally-friendly way of producing green hydrogen, the market has faced up to the fact that the low-carbon type of hydrogen made from renewables remains very expensive and needs a lot of subsidies, incentives, and government support to exist.
By Tsvetana Paraskova for Oilprice.com
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