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The U.S. hydrogen economy will likely rely on natural gas and carbon capture technologies rather than green energy in Donald Trump’s second term, according to BloombergNEF.
Billions of dollars of investment have stalled in 2024 waiting for the Biden administration to formalize rules around the expected tax credits for green hydrogen, the analysts said in a report on Jan. 16.
The zero-carbon fuel is made by splitting water into hydrogen and oxygen using electrolyzers powered by green electricity. Its blue counterpart is produced by employing gas to run the process and storing emissions away from the atmosphere.
Blue ammonia, used as hydrogen carrier, could be produced in old plants retrofitted with capture technologies, reducing costs and making the U.S. more competitive internationally, according to BNEF.
While the promised tax credits for green hydrogen producers are “unlikely to be scrapped, developers may not get an answer immediately,” the analysts said. On the other hand, blue hydrogen is expected to grow with up to 377,000 tons of capacity going online by end 2025, from 78,000 tons at the end of 2024.
Beyond limited pockets of growth, the global hydrogen sector is likely to struggle this year. Companies may deal with canceled projects and sluggish demand, leading to consolidation.
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