Nearly 60 major low-carbon hydrogen projects have been cancelled or delayed this year due to soaring costs, policy uncertainty, and weak demand, according to Clara Murray of The Financial Times. These setbacks affect projects that could have produced 4.9 million tonnes of hydrogen annually—more than four times the world’s current capacity. Despite early enthusiasm for hydrogen as a clean fuel for hard-to-decarbonize sectors, challenges such as high infrastructure costs, limited storage and transport, and inconsistent government support have hindered progress. Murray writes:
Almost 60 major low-carbon hydrogen projects including by oil groups BP and ExxonMobil have been cancelled or put on hold this year, as the industry is hit by spiralling costs, policy uncertainty and a lack of buyers.
The projects that have been cancelled or paused had a combined annual output of 4.9mn tonnes, according to data from S&P Global, equivalent to more than four times the world’s installed clean hydrogen capacity.
BP last week pulled out of planned investments in hydrogen plants in Oman and Teesside in north-east England, having abandoned this year a green hydrogen facility that was set to be built in Australia. Exxon last month paused a hydrogen plant in Texas that would have been one of the world’s largest.
Equinor, ArcelorMittal and Vattenfall are among companies that have cancelled or delayed hydrogen plants in the past 18 months, while Shell scrapped an early-stage project in Norway. […]
“It’s been a challenging year or two for any company trying to develop [clean] hydrogen projects,” said Murray Douglas, head of hydrogen research at Wood Mackenzie. “The willingness to pay any sort of green premium across all low-carbon technologies has evaporated.” […]
More than 2,600 projects had been announced globally by the end of 2024, according to the International Energy Agency, including big plants in places with abundant solar and wind energy such as Australia, Mauritania and Egypt.
The agency, which estimates that clean hydrogen needs to increase 10-fold by 2035 to meet net zero emission goals to limit global warming, has said just a quarter of projects in the pipeline for 2030 will probably be built by then.
Read more here.
