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US hydrogen hype gives way to more practical prospects

US hydrogen hype gives way to more practical prospects

Developers have reined in expectations, seeking faster commerciality for more specific applications, writes Jasmina Kelemen Houston, 21 March (Argus) — Hydrogen's one-time promise as a wonder fuel has been replaced in 2025 with a more practical understanding of its limitations, a momentum shift welcomed by industry proponents who gathered in Houston, Texas, last week at the CERAWeek by S&P Global energy conference. It has been a roller-coaster ride for the sector since the administration of President Joe Biden zeroed in on hydrogen as a means of reducing emissions and creating jobs, unveiling generous tax incentives in 2022's Inflation Reduction Act (IRA). A frenzy of project proposals soon followed. That excitement dissolved into a frustrating wait as the administration embarked on a years-long review process that only concluded in January with the release of finalised rules for the 45V production tax credits, leading some to conclude the hydrogen dream had crashed before take-off. The reality is more nuanced. "The death of hydrogen has been greatly exaggerated," Chevron's vice-president of hydrogen, Austin Knight, said at CERAWeek. "There are real projects actually happening," he said, pointing to the company's ACES Delta joint venture with Mitsubishi Power. The Utah project is forecast to initially convert 220MW of renewable power into 100 t/d of hydrogen, and will begin operations this year. Whittling the sector down to its most realistic prospects is a welcome departure from previous years, when hydrogen was viewed as the "Swiss army knife" of fuels — a tool that could be used to solve almost any problem — Oleksiy Tatarenko, senior principal at Rocky Mountain Institute, said. It is now being viewed as a more precise approach for specific applications in ‘hard-to-abate' industries such as steel and chemicals, he said. BP still sees hydrogen as an important component to decarbonising refineries, but its deployment timeline will be longer than expected, BP's senior vice-president of refining, terminals and pipelines, Amber Russell, said. BP has scaled back hydrogen plans, shelving 18 projects since October. Of those remaining, two include refineries in countries with fiscal incentives for hydrogen production, and near other industries looking to cut emissions. BP's 440,000 b/d Whiting refinery in Indiana could have similar potential, Russell said, but "45V ...and the IRA are incredibly important to helping us understand when that happens". One among many Hydrogen's shifting position in the clean energy landscape could even be seen in the CERAWeek conference's floor plan this year. In a space for showcasing new technologies and ideas, the Hydrogen Hub of previous years had disappeared, replaced by a New Energies Hub, under which hydrogen was just one of multiple clean-energy solutions on display, along with biofuels, nuclear power and other renewables. "That is a positive thing for this space writ large," GTI Energy's Open Hydrogen Initiative executive director, Zane McDonald, said. "We are starting to get very practical," he said. "We want to focus on projects that are going to make money, that have an offtaker and can materialise in the next two years." Among the projects expected to take off most rapidly are those that can tap into demand for lower-carbon fuels in Europe and Asia or more modestly sized US producers located near specialty industries that are looking to curb emissions. "The quality of the projects we're seeing in our pipeline is better," said Black & Veatch hydrogen and ammonia director Bryan Mandelbaum, who sees a growing niche for 10-200MW projects targeting heavy industries such as chemical processors. He contrasted this favourably with a flurry of clients that appeared after the 45V tax was first announced. "It was good for business in the short term, but at the same time you knew 80pc of those were never going to develop." Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.