Brink Of Extinction: Companies Abandon Hydrogen As Costs, Failures Mount

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ENB Pub Note: The No Tricks Zone below has some excellent points. We are seeing a realignment of energy projects to move forward without subsidies. Although White Hydrogen is the only natural color or type of hydrogen, it may be commercially viable. The following is a summary of global investment in hydrogen production. 

• Global Context: The Hydrogen Council reports $680 billion in announced investments through 2030, with $75 billion committed to projects reaching final investment decision (FID) by May 2024. Government RD&D spending on hydrogen technologies has quadrupled in the last five years, growing 5% in 2023 alone.
• Challenges: Only 7% of announced projects have reached FID due to regulatory uncertainties, demand-side policy gaps, and infrastructure limitations. Investments are often region-specific, with Europe and Asia leading due to strong policy frameworks.
• Data Limitations: Exact figures for some countries are incomplete or outdated, and private-sector investments are harder to quantify. Where precise data is unavailable, estimates or qualitative rankings are provided based on project pipelines and national strategies.

1. European Union (Collectively)
   • Investment: €550 billion (approx. $609 billion USD) committed to green hydrogen production and infrastructure by 2020, with €18.9 billion ($19.5 billion USD) approved for hydrogen-related projects under the Important Projects of Common European Interest (IPCEI) by 2023, leveraging an additional €10 billion ($10.3 billion USD) in private investment.
   • Details: The EU’s Hydrogen Strategy (2020) targets 40 GW of green hydrogen electrolyzer capacity by 2030, though only 2.7 GW is expected by 2025. France and Germany alone have announced €30 billion in subsidies for hydrogen technology and infrastructure. The European Clean Hydrogen Alliance supports large-scale deployment.
   • Key Countries:
     • Germany: $339 billion in clean energy investment (including hydrogen) by June 2023, with $14.19 billion earmarked for 24 hydrogen projects. In 2024, a $746 million fund backed ThyssenKrupp’s Nucera electrolyzer project.
     • France: $150 billion in clean energy, with $28.5 billion for hydrogen-related energy efficiency and transport.
     • Netherlands: $860 million allocated in 2024 for electrolyzer innovations to reach 4 GW by 2030.
   • Why Leading: Strong policy support via the European Green Deal, ambitious 2030 targets (10 million tonnes produced, 10 million imported), and extensive RD&D funding.
2. China
   • Investment: $42.04 billion (300 billion yuan) in green hydrogen business by 2023, per CCTV. Total clean energy investment reached $353 billion in 2021, with hydrogen as a key component.
   • Details: China is the world’s largest hydrogen producer (mostly fossil-based) but is scaling green hydrogen via its 14th Five-Year Plan. It leads in electrolyzer deployment, with a significant share of the 180 kilotonnes of global electrolysis-based hydrogen produced annually. The China Hydrogen Alliance, backed by 18 sponsors, invests globally in fuel cell R&D. As of 2024, China has 226 hydrogen refueling stations, the most globally.
   • Why Leading: Massive industrial base, government-backed hydrogen roadmap since 2016, and focus on decarbonizing steel and chemicals.
3. United States
   • Investment: $559 billion in clean energy by June 2023, with $114 billion in 2021 alone, including $9.5 billion from the 2021 Infrastructure Investment and Jobs Act for clean hydrogen. Private investments include over $200 million by Amazon and Walmart in hydrogen-powered forklifts.
   • Details: The 2022 Inflation Reduction Act offers the world’s most generous clean hydrogen subsidies, driving a wave of green hydrogen projects. The U.S. funds 29 hydrogen storage and infrastructure pilots via the H2@Scale initiative. By 2030, the U.S. is projected to be a top green hydrogen producer alongside Australia and Spain.
   • Why Leading: Significant federal funding, private-sector engagement, and leveraging existing natural gas infrastructure for blue hydrogen.
4. Japan
   • Investment: $664 million in 2020 for hydrogen and fuel cell technologies, increased by 16% to $664 million in 2020 for import infrastructure. Mitsubishi Corporation announced $690 million in 2024 for the Eneco Electrolyzer in the Netherlands, reflecting Japan’s global investment reach.
   • Details: Japan, the first to formulate a national hydrogen strategy (2017), aims to be a “hydrogen society” by 2050, targeting 800,000 fuel cell electric vehicles (FCEVs) and 900 refueling stations by 2030. It leads in hydrogen refueling stations (third globally with 100+ as of 2022) and has 40,000 FCEVs in circulation.
   • Why Leading: Early adopter of hydrogen technologies, focus on transport (e.g., Toyota Mirai), and import-driven strategy due to limited domestic renewable resources.
5. South Korea
   • Investment: Specific figures are less clear, but South Korea’s 2019 Hydrogen Roadmap and 2021 Economic Promotion and Safety Control of Hydrogen Act signal billions in investments. Clean energy investment is part of broader decarbonization efforts, with hydrogen prioritized for 10% of energy needs by 2030.
   • Details: South Korea aims to lead in green hydrogen technology by 2040, with 6,000 fuel cell electric buses and 3,100 trucks globally (mostly domestic). It has 100+ hydrogen refueling stations as of 2024, second globally. Companies like Hyundai drive fuel cell vehicle innovation.
   • Why Leading: Aggressive hydrogen economy roadmap, focus on transport and offshore wind, and legislative support for infrastructure.
6. Australia
   • Investment: Over $1 billion AUD ($700 million USD) for domestic hydrogen industry, including $146 million AUD for projects and $100 million AUD for research. A $388 million blue hydrogen project with Japan is underway.
   • Details: Australia had 96 green hydrogen plants as of 2022, the most globally, driven by abundant solar and wind resources. It aims to be a top-three hydrogen exporter to Asia by 2030, with projects like the Australia Renewable Energy Hub potentially producing 1.5 million tonnes annually by 2030.
   • Why Leading: Renewable energy potential, export-focused strategy, and numerous green hydrogen projects.
7. United Kingdom
   • Investment: $664 million (£500 million) in 2020 for clean hydrogen, with $238 million for net-zero hubs including hydrogen projects. The UK’s Hydrogen Strategy (2021) targets 5 GW of low-carbon hydrogen by 2030.
   • Details: The UK ranks in the top five for green hydrogen plans, with investments in production and transport. It focuses on both green and blue hydrogen, with projects like net-zero hubs to reduce infrastructure costs.
   • Why Leading: Robust hydrogen strategy, net-zero 2050 goal, and government-backed funding for infrastructure.
8. Canada
   • Investment: $1.5 billion CAD ($1.1 billion USD) Clean Fuels Fund launched in 2021, with projections of a $50 billion CAD hydrogen sector by 2050.
   • Details: Canada ranks among the top 10 hydrogen producers and hosts the world’s largest clean hydrogen facility. Projects like First Hydrogen’s 100 MW+ sites in Quebec and Manitoba focus on green hydrogen for automotive use. The country leverages hydroelectric and nuclear power for zero-carbon production.
   • Why Leading: Advanced fuel cell expertise, net-zero legislation (Bill C-12), and export potential.
9. Saudi Arabia
   • Investment: Specific figures are less detailed, but Saudi Arabia is building the world’s largest green hydrogen project (Neom, with ACWA Power and Air Products), costing billions. Saudi Aramco’s $200 million blue ammonia export in 2020 reflects private investment.
   • Details: The Neom project includes 4 GW of solar and wind to produce 600 tonnes of green hydrogen daily. Saudi Arabia aims to diversify energy exports via hydrogen.
   • Why Leading: Mega-projects and oil wealth transitioning to clean energy.
10. Chile
    • Investment: Specific figures are limited, but Chile’s National Green Hydrogen Strategy outlines significant infrastructure investments, expecting 124,000 tons of green hydrogen annually from projects like HyEx and Highly Innovative Fuels. The country aims to invest $7 billion for 5 GW of green hydrogen by 2030.
    • Details: Chile leverages abundant solar and wind in the Atacama Desert, aiming to be a top-three global hydrogen exporter.
    • Why Leading: Renewable energy potential and export-focused strategy.

• Investment Scope: Figures include government funding, private capital, and announced projects, but not all are fully realized (e.g., only 4% of announced projects have FID).
• Green vs. Blue Hydrogen: Green hydrogen dominates investment in Europe, Australia, and Chile, while blue hydrogen (with carbon capture) is significant in the U.S., Canada, and Saudi Arabia.
• Gaps: Data for South Korea, Saudi Arabia, and Chile lacks precision due to limited public reporting. Estimates are based on project scales and national strategies.
• Critical Perspective: While these investments signal optimism, the hydrogen economy faces hurdles like high costs, energy losses, and inconsistent demand. Overreliance on subsidies and unproven mega-projects could inflate figures without proportional outcomes.

Companies are waking up to the harsh reality that ‘green’ hydrogen won’t solve the high costs and challenges of relying on renewables.

​Once considered a key technology in the green energy transition, companies are waking up and finding out that hydrogen isn’t the answer to the challenges posed by renewable energies such as wind and sun. [emphasis, links added]

“Instead of progress, disillusionment dominates. The EU, in particular – especially Germany – is increasingly being criticized for its costly projects,” reports German online Blackout News. “Companies are pulling out”.

Hydrogen is expensive, hazardous, and a real technical challenge that doesn’t promise to be economically feasible.

The gas is metallurgically aggressive, highly flammable, and explosive. Its chemical properties make a comprehensive infrastructure difficult to manage.

Moreover, producing green hydrogen is “barely affordable,” and industries are reluctant to use the volatile gas because it risks being unprofitable.

High costs, low demand, and political misplanning are currently jeopardizing the strategy, according to an analysis by Westwood Global Energy Group: “Only a fraction of the planned EU hydrogen pipeline is likely to be operational by 2030.”

Germany has funded an ambitious green hydrogen project in a protected desert area in Namibia, and now it may be demolished for port expansion as the country’s new president is reportedly reassessing the project and looking at a potential shift toward the established oil sector.

Technical analyses indicate that hydrogen is only suitable as a selective energy source.

Unless there is a major change of course, the EU’s hydrogen strategy risks being a costly failure.

Top image via Wärtsilä Corporation/YouTube screencap

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