Let’s start with the conclusion: the wave of cancellations hitting large-scale hydrogen projects is not a catastrophe—it’s a sign of progress. The sector is maturing quickly, shedding glossy proposals and players unwilling to adapt, while leaving space for quiet, effective pioneers.
The Hype Bubble Has Burst—And That’s a Good Thing
Between 2021 and 2023, demand for low-carbon hydrogen remained marginal—under one million tonnes compared with total global hydrogen demand of 97 million tonnes, still mostly fossil-based. At the same time, the “Hydrogen Insights 2024” report noted a seven-fold increase in global electrolysis capacity that passed final investment decision (FID) over four years, though still modest at around 20 GW.
In Europe, 3 GW of electrolyser capacity has cleared FID, expected to deliver about 415,000 tonnes of renewable hydrogen annually. By contrast, blue hydrogen projects have seen over 1.4 million tonnes per year cancelled, with only ~400,000 tonnes per year surviving to FID. The lesson is clear: oversized ideas that fail basic economics don’t survive.
This correction is healthy. Projects moving forward are smaller, better designed, and directly tied to decarbonisation needs.
Real Hydrogen: Focused and Practical Projects
Take Engie’s Yuri project in Western Australia: Phase 1 involves a 10 MW electrolyser powered by 18 MW of solar and backed by an 8 MW battery. It will supply ~640 tonnes of renewable hydrogen annually to Yara’s ammonia production. Unflashy, but effective—demand is clear, production is underway.
In Europe, Engie has also greenlit its share of the mosaHYc hydrogen pipeline between France and Germany, while the H2Med/Barmar corridor between Barcelona and Marseille is targeting up to 2 million tonnes a year by 2030. Germany’s Lubmin ammonia-to-hydrogen terminal aims for final approval by end-2025, targeting costs near $3–3.50/kg by 2027—well below current European levels of $8–10/kg.
These are not megaprojects chasing headlines. They are industrially anchored solutions, fitting into hard-to-abate sectors such as ammonia, methanol, refining, and steelmaking.
Why Smaller is Smarter
Failed megaprojects often lacked clear offtake, relied on unproven technologies, or pursued unrealistic scale. By contrast, today’s survivors are embedded in existing industrial demand, with clear economics. Blue hydrogen, for instance, can be produced in Europe at €3.8–4.4/kg—far cheaper than most green hydrogen.
This shift means fewer projects overall, but stronger, more sustainable ones—designed to deliver real industrial decarbonisation rather than speculative hype.
Policy Support Becomes More Targeted
Policy frameworks are also maturing. The EU’s Hydrogen Bank is directing funds to projects with genuine emission-reduction value. Germany’s KfW is financing import terminals rather than forcing uneconomic domestic production. Public money is being channelled where hydrogen is needed most.
A Smaller, Better Hydrogen Economy
The hydrogen economy will likely be smaller than early, exaggerated forecasts suggested. But that is a strength, not a weakness.
A leaner sector that displaces fossil-based hydrogen, cuts emissions in heavy industry, and builds on solid engineering is far preferable to a sprawl of doomed giga-projects. What matters now is not thousands of ideas, but a handful of excellent ones. Let the bad ones die. Let the noise fade. What remains is real.
