At least three large-scale blue hydrogen projects in the US will reach a final investment decision (FID) in 2025, according to an analysis from Wood Mackenzie.
Exceeding 1.5 million tonnes per annum, the successful progression of financial closes would firmly establish the nation as the global leader in blue hydrogen production – already boasting the largest post-FID blue hydrogen capacity in the world.
Furthermore, the Hydrogen: 5 things to look for in 2025 report claimed green hydrogen will face “significant headwinds in 2025, with FID’s continuing to disappoint.”
The report added, “The expectation is grounded in anticipation of the incoming Trump administration’s failure to champion decarbonisation technologies, as well and the overturning of Chevron Deference, which could introduce regulatory uncertainty.
“Additionally, competition from other industries, particularly data centres, and long interconnection queues has the potential to further hinder green hydrogen’s growth.
“While there will still be some demand driven by corporate decarbonisation efforts, near-term opportunities for green hydrogen will shrink, and we anticipate a substantial uptick in cancellations, particularly for projects targeting mobility, steel and e-fuels.”
Following Trump’s victory in November (2024), some sources told H2 View that the new administration could adopt an “all-of-the-above strategy – making isolated cuts to the Inflation Reduction Act’s (IRA) climate provisions while keeping elements that align with the administration’s broader policy goals.
Read more:Analysis: Can hydrogen’s bipartisan appeal survive the Trump-Vance administration?
Wood forecasted blue hydrogen to prevail, based on the expectation of continued support for the 45Q tax credit.
“The support will help maintain the financial viability of blue hydrogen projects,” the report wrote, “Promoting domestic uptake and preserving the US’ advantaged position to export blue hydrogen as global demand rises in markets like Japan and Europe.”
The global analyst highlighted key projects to watch, including ExxonMobil’s Baytown facility, Lake Charles Methanol II, Linde’s Beaumont site, CF Industries’ Blue Point Complex, as well as the Wabash Valley Resources Hydrogen and El Dorado Ammonia projects.
Read more:Mitsubishi eyes stake in ExxonMobil’s major blue hydrogen project in Texas
The assessment was also identified by Murray Douglas, Vice-President and Head of Hydrogen Research at Wood Mackenzie. “A Republican presidency puts parts of the Democrat-introduced Inflation Reduction Act (IRA) at risk. At this stage we cannot rule out a full repeal,” he said, speaking at the consultancy firm’s Hydrogen Conference 2024 in London shortly after Trump’s win was confirmed.
Read more:Trump’s election victory solidifies blue hydrogen outlook – Wood Mackenzie
“There are also some risks that attach to the incoming administration introducing trade tariffs on goods entering,” he continued. “North America is strongly weighted to blue rather than green hydrogen when we look at lower carbon intensity hydrogen in the round.
“So the challenge from here in many respects is for developers to secure binding offtake agreements into order to unlock further final investment decisions on projects.”
