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30 Jan 2025

Hydrogen Market Databook 2025: North America

The US Department of Energy (DOE) released the US National Clean Hydrogen Strategy and Roadmap in mid-2023. The initiative builds on the Bipartisan Infrastructure Law passed in November 2021, which allocated more than $60b for the US DOE, including $9.5b to develop a national green hydrogen ecosystem. Approximately nine months later, Congress passed the Inflation Reduction Act (IRA), which provided additional incentives and policies to boost domestic hydrogen production, including new tax credits for hydrogen producers.

The US hydrogen roadmap aims to produce 10mt/yr of clean hydrogen by 2030, 20mt/yr by 2040 and up to 50mt/yr by 2050 (see Fig.1). To meet these ambitious goals, the report detailed three key strategies:

Target strategic, high-impact uses for clean hydrogen. This strategy promotes the use of green hydrogen in various industrial industries (e.g., refining, chemical production and steelmaking) and the transportation sector (e.g., heavy-duty, hydrogen-powered trucks).
Reduce the cost of clean hydrogen. For green hydrogen production to be economical, the cost of production must decrease substantially. Therefore, the DOE created the Energy Earthshots Initiative, focusing on the research, development and deployment of abundant, affordable and reliable energy systems/solutions. The DOE’s first Energy Earthshot is the Hydrogen Shot, which seeks to reduce the cost of clean hydrogen production
to $1/kg in one decade (i.e., the ‘1-1-1’ initiative).

To make clean hydrogen production cost competitive versus. other forms of hydrogen production routes (e.g., via fossil fuels), the IRA proposed tax incentives of up to $3/kg of hydrogen produced. This incentive is known as the 45V tax credit. In December 2023, the US Treasury Department released proposed guidelines on how companies could qualify for the 45V tax credit, but these caused an uproar due to the more strenuous rules for qualification. To qualify, companies must adhere to the three pillars: incrementality, temporal matching and deliverability.

Incrementality: The hydrogen producer must prove the power used for hydrogen production is from carbon-free sources and not from the electricity grid that, most likely, uses fossil fuel feedstock (e.g., natural gas).
Temporal matching: Also referred to as ‘hourly matching’, this regulation refers to the time an electrolyser is operating. The hydrogen producer must prove that carbon-free power was being sourced during the time that the electrolyser was in operation.
Deliverability: This guideline ensures hydrogen producers source carbon-free power (feedstock) from renewable sources near the vicinity of the hydrogen production plant. For example, a green hydrogen plant in Houston, Texas must secure carbon-free power from
a renewable producer in/around southeast Texas and not from a renewables’ producer in California.

These three pillars are important clauses to the 45V tax credit, especially since they have caused much contention with many hydrogen facility developers. The more stringent regulation means certain producers (e.g., blue hydrogen producers) may not qualify for the full tax credit, which could result in such projects being uneconomical to pursue.

For example, ExxonMobil has announced it may scrap its $7b blue hydrogen project at its 588,000b/d Baytown refinery and chemicals complex if it cannot secure tax credits. This development—the largest blue hydrogen project in the world—would produce approximately 1bcf/d of blue hydrogen (the project includes CCS that would store up to 10mt/yr of CO₂) which would be used to decarbonise the complex’s olefins production operations. At the time of publication, the final rule is expected to be announced by the US Treasury by early 2025.

Focus on regional networks. This objective focuses on the creation of hydrogen hubs in the hope that scale will drive production—i.e., more production will drive down the cost to produce. In October 2023, the US DOE announced more than $7b of funding for seven regional hydrogen hubs in the country:

Appalachian hydrogen hub (ARCH₂): $925m
California hydrogen hub (ARCHES): $1.5b
Gulf Coast hydrogen hub (HyVelocity): $1.2b
Heartland hydrogen hub (Heartland): $925m
Mid-Atlantic hydrogen hub (MACH₂): $750m
Midwest hydrogen hub (MachH₂): $1b
Pacific Northwest hydrogen hub (PNW H₂): $1b

These strategies are not without challenges, primarily offtake demand and the capital cost for development. For example, the National Petroleum Council (NPC), in partnership with the Massachusetts Institute of Technology (MIT), commissioned a report for the US DOE that showed the US must develop approximately 75mt/yr of low-carbon-intensity hydrogen to reach net-zero emission abatement targets.

The US government’s current policy scenario aims for 50mt/yr of low-carbon hydrogen production by 2050—well short of the report’s recommended target. This means the US will have to increase hydrogen production about seven times the current domestic production of around 11mt/yr.

Under the US’ current net-zero strategy of installing 50mt/yr of clean hydrogen by 2050, electrolyser production capacity would need to increase from under 1GW in 2024 to 65GW by 2030 and up to 400GW by 2050. This scale-up would require domestic renewable energy to increase to more than 700GW by 2050, according to the NPC/MIT report. Total capex to develop both renewable energy and low-/zero-carbon hydrogen production would be approximately $1.9t. At the time of publication, approximately $500b in projects have been announced.

US projects

Regardless of the significant capex needed to reach net-zero ambitions, the US plans to be a leader in green and blue hydrogen production. According to the DOE, approximately 12mt/yr of clean hydrogen production is under development, with nearly a dozen having an electrolyser larger than 100MW (see Fig.2 and Fig.3). Like most nations, the produced hydrogen will help decarbonise several different sectors of the US economy, including refining (e.g., processing operations and efuels) and petrochemicals/chemicals production (e.g. green/blue ammonia production, transportation (long-haul trucks, passenger vehicles, mass transit vehicles such as buses, aviation, marine vessels and hydrogen fuelling networks), iron/steel and cement production and electricity generation, among others.

According to the GEI database, the US follows only Western Europe and Asia in number of total active hydrogen product market share. At the time of publication, the GEI database was tracking nearly 170 active hydrogen projects in the US, accounting for 12% of global active project market share. Texas (18%) and California (16%) account for the highest hydrogen project market share in the country, followed by Louisiana (7%). However, hydrogen projects can be found in nearly 35 other US states. These projects include investments all along the hydrogen value chain—i.e., renewable energy production, electrolyser builds, green and blue hydrogen production, CCS technologies, hydrogen infrastructure and distribution networks (e.g., hydrogen fuelling stations, hydrogen pipelines, hydrogen-natural gas blending), and export terminals, among others.

Canada

Canada has announced a policy goal of reaching net zero by 2050. To reach this goal, clean hydrogen will certainly play a role in decarbonising various domestic industrial sectors. The nation published its Hydrogen Strategy for Canada in late 2020. The plan called for Canada to be a world leader in hydrogen supplies, generate hundreds of thousands of new jobs and utilise hydrogen to reach net-zero target goals.

According to the report, Canada is targeting hydrogen to deliver up to 30% of the region’s end-use energy by 2050—this would increase domestic hydrogen demand to 4mt/yr by 2030 and up to 20mt/yr by 2050. Canada plans to use a mixed pathway to produce hydrogen.

This includes both green hydrogen production, blue hydrogen production with CCS or CCUS technologies, gasification of biomass and as a byproduct from industrial operations. These pathways will enable Canada to decarbonise various sectors of the economy, including transportation, power generation, heat for industry and buildings, and feedstock for the refining and chemical processing industries. A map of hydrogen production and end-use industries is shown in Fig.4. Canada’s hydrogen goals by 2050 include:

Hydrogen providing 30% of Canada’s energy
Domestic production exceeding 20mt/yr
Scale production to reduce hydrogen production costs to $1.50–3.50/kg
Place more than 5m fuel-cell electric vehicles on the road
Build a nationwide hydrogen fuelling network
Replacing more than 50% of natural gas in pipelines with hydrogen, including the establishment of new hydrogen-dedicated pipelines
Create more than 350,000 domestic jobs, develop more than $50b in direct hydrogen sector revenues and establish a competitive hydrogen export market
Significantly reduce greenhouse gas emissions.

The nation’s hydrogen strategy is built on eight pillars: building strategic partnerships; derisking investments; developing innovations; creating codes and standards; enabling policies and regulations; creating awareness; setting forth regional blueprints; and seeking international export market partners.

In 2024, Natural Resources Canada issued a progress report on the nation’s hydrogen developments since the release of the government’s hydrogen strategy in 2020. Within the last three years, nearly 3,500t/yr of low-carbon hydrogen production capacity has become operational in Canada, with more than 5mt/yr of hydrogen production capacity announced or under development. Canada has also developed 12 international agreements, released six provincial strategies, announced 23 export projects and put eight regional hubs under development. According to the report, these hubs include the Edmonton Region Hydrogen Hub and Quebec’s Energy Transition Valley, with the rest in the regions of Calgary (Alberta), Grey-Bruce (Ontario), Prince George (British Columbia), Sarnia-Lambton (Ontario), Selkirk (Manitoba) and Vancouver (British Columbia).

The Canadian government also instituted the Clean Hydrogen Investment Tax Credit (CHITC), which is a refundable investment tax credit for investments made in clean hydrogen production based on lifecycle carbon intensity. The tax credit is available for electrolysis projects and natural gas-based hydrogen projects with the inclusion of CCS or CCUS technologies. The CHITC was passed along with the Clean Technology ITC, CCUS ITC and the Clean Technology Manufacturing ITC. In total, these incentives will provide approximately $67b by 2035 to help spur the nation’s hydrogen strategy.

Other programmes have been created to aid the development of a hydrogen ecosystem in the nation. These include the Clean Fuels Fund, the Strategic Innovation Fund–Net-Zero Accelerator, the Canada Growth Fund, Canada Infrastructure Bank financing, the Zero Emission Vehicle Infrastructure Program, the Zero Emission Transit Fund and the Zero Emission Trucking Program.

Each province has its own directives and pathways to promote the development of green and blue hydrogen value chains. At the time of publication, the GEI database was tracking more than 50 active hydrogen projects in Canada, representing more than $70b in total capex. Most projects are in five provinces: British Columbia (21%), Alberta (19%), Newfoundland and Labrador (19%), Quebec (17%) and Ontario (13%). The remaining 11% are spread throughout a few provinces such as Nova Scotia, Manitoba and Saskatchewan. Notable hydrogen projects and initiatives in Canada are detailed in Fig.5.

FIG.5: NOTABLE PROJECTS AND INITIATIVES IN CANADA

Province	Project	Developers	Scope
Alberta	Net-zero H2 energy complex	Air Products	The company is building a $1.15b complex consisting of H2 production, carbon capture operations, a power generation facility, a 30t/d H2 liquefaction facility and other infrastructure.
Alberta	Path2Zero project	Dow Chemical	The project includes expanding ethylene and polyethylene production at the site by 1.9mt/yr and using H2 to decarbonise the ethylene process.
Alberta	Battle River Carbon Hub	Heartland Generation	The company is developing a 400MW H2-fired electricity generation facility that will include CCS.
Alberta	Blue ammonia production facility	Inter Pipeline, ITOCHU Corp. Petronas Energy Canada	The $1.3b plant could produce up to 1mt/yr of blue ammonia (ammonia production using blue H2 with CCS). The ammonia will be exported to Asian markets.
Alberta	HCC low-carbon H2/ammonia production facility	Hydrogen Canada Corp.	If built, the facility will produce 1mt/yr of low-caron ammonia. The blue ammonia will be exported to South Korea and other Asian markets.
Alberta	Blue ammonia supply chain	Pembina Pipeline, Marubeni	The plant will produce up to 185,000t/yr of blue H2 that will be converted into 1mt/yr of blue ammonia. The project’s goal is to build a blue ammonia supply chain from Canada to Japan.
Alberta	Green H2 supply chain	ATCO, Kansai Electric Power Co.	The two companies are conducting a feasibility study to produce a clean-H2 value chain from Alberta to Japan.
British Columbia	H2 Gateway	HTEC	The $900m project includes the construction of H2 production plants and 20 H2 fuelling stations around the Vancouver area. The H2 fueling stations will receive H2 produced from three plants (Burnaby, Nanaimo, Prince George).
British Columbia	Prince George H2 production and refuelling station	Hydra Energy	The > $60m refuelling station has been dubbed the 'world’s largest H2 refuelling station'. Once operational in 2026, the facility will produce 3,250kg/d of H2 to refuel heavy-haul H2 vehicles.
British Columbia	Tumbler Ridge methanol project	Renewable Hydrogen Canada Corp.	The facility will use both natural gas and renewable power to produce e-methanol and green methanol. Total output is expected to reach 1.75mt/yr once operational. The facility is scheduled to begin operations in 2028.
British Columbia	Tse’khene energy transition hub	McLeod Lake Indian Band	The $7b complex will produce both blue and green H2. It will also contain a connecting plant to handle NGLs.
Manitoba	Flin Flon Clean Energy hub	Minnova Renewable Energy	The project includes the construction of a large-scale green H2 production plant, and the facilitation of a green H2 value chain in the region.
Newfoundland and Labrador	Project Nujio’qonik	World Energy	The $12b project includes a windfarm and a plant to produce 250,000t/yr of green H2, which will be converted into 1.2mt/yr of green ammonia.
Newfoundland and Labrador	Project Gwinya	CWP Global, Corner Brook Port Corp.	The project will harness 5GW of wind energy to produce green H2, which will be used to decarbonise the area’s iron industry—the hub includes a hot briquetted iron plant that will use green H2 in the steelmaking process.
Newfoundland and Labrador	Exploits Valley Renewable Energy Corp. (EVREC) project	EVREC	The large-scale, $8.8b power-to-X (P2X) project includes a 3.5GW onshore windfarm and 150MW solar array to produce 200,000t/yr of green H2 and 1mt/yr of green ammonia. The facility also includes port infrastructure to export green ammonia to international markets.
Newfoundland and Labrador	Project Lynx	FFI	The multibillion-dollar project includes the construction of a 700,000–900,000t/yr green ammonia plant. At the time of this publication, no additional news on the project was available regarding status.
Newfoundland and Labrador	Burin Peninsula Green Fuels project	EverWind	The > $8b project includes the construction of a 2–3GW wind farm to produce green H2/ammonia.
Nova Scotia	Point Tupper green ammonia project	EverWind	The $6b project will produce 250,000t/yr of green ammonia in 2025, and then ramp up to full production of 1mt/yr of green ammonia in 2026. A second phase includes the construction of a windfarm for feedstock production.
Nova Scotia	Bear Head H2 production and ammonia export project	Bear Head Energy	The project was converted from an LNG export terminal project to a green H2 and ammonia production facility. Once operational, the facility can produce up to 2 mt/yr of green ammonia which will be exported to international markets.
Ontario	Hydrogen Innovation Fund	Government of Ontario	The fund will provide up to $15m in funding to jumpstart the province’s H2 economy. In Q3 2023, six projects were awarded funding. These project’s included Enbridge’s H2 combined heat-and-power project, Emerald Energy’s waste-to-H2 plant, Carlsun Energy Solutions’ H2 production plant for H2 fueling systems and power generation for green ammonia production, Kinectrics H2 production facility for power generation and vehicle fueling, and the University of Windsor’s research in using low-carbon H2 for power grid services.
Quebec	Project Mauricie	TESCanada	The $4b project is a green H2 hub that will produce 70,000t/yr of green H2 to decarbonise transportation and various industrial sectors of the province.
Quebec	Varennes Carbon Recycling plant	Enerkem, Shell, Suncor, Proman	The > $900mm facility will produce both H2 and biofuels.
Quebec	Sorel-Tracy Green Hydrogen project	Charbone Hydrogen Corp.	Phase 1 will produce 400kg/d of green H2, which will ramp up to full capacity of 10t/d.
Quebec	Sept-Iles green iron plant	H2 Green Steel	The company has proposed two options. Option 1 is a $6b green H2-derived iron and steel plant. Option 2 is for a $3b green iron plant only. The decision will be up to whether the company can access the region’s hydroelectric power supply for green H2 production.
Quebec	Courant green H2/ammonia plant	Hy2gen Canada	The plant will use hydroelectric power to fuel a 300MW electrolyser for green H2 production, which will be converted into 237,000t/yr of green ammonia. First green ammonia production is scheduled for 2029.
Quebec/Newfoundland and Labrador	Green Shipping Corridor initiative	Port of Montreal, QSL, Oceanex	The companies are exploring the creation of a green shipping corridor between the Port of Montreal, Quebec and St. John, Newfoundland and Labrador. The goal is to decarbonise the shipping sector in this region by using alternative fuels such as H2, ammonia and/or methanol.
Saskatchewan	Belle Plaine fertiliser plant	Genesis Fertilizers	The project moved into pre-FEED in Q2 2024. If built, the facility may use green H2 to produce 1,500t/d of ammonia and 2,600t/d of urea, along with a few other products.
Saskatchewan	Project Apollo	ProtonH2	The plant, located in the Kerrobert area, will produce 500t/d of low-carbon intensity H2 at a cost of less than $1/kg. The facility is expected to begin operations by 2026.