Clean hydrogen set for commercial liftoff by 2030

Department of Energy report says planned project capacity increased 26% in 2024.

January 22, 2025 Michael Puttré

Clean hydrogen production

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The U.S. government, largely through the Department of Energy (DOE), has been active in the development and commercialization of hydrogen production methods, particularly so-called “clean” processes involving carbon capture or electrolysis. A recently updated DOE report projects clean hydrogen could achieve commercial liftoff, a term it defines as being cost-competitive with fossil-fuel-based production methods or carbon-intensive alternatives, in certain sectors by 2030.

Hydrogen is in widespread use in many industries, including agriculture and petrochemicals. However, gas sources have largely come from fossil fuels such as natural gas and coal, and depending on the process, generate carbon dioxide and other pollutants. A common method for producing clean hydrogen is to capture and sequester carbon emissions at the point of production.

Electrolysis, where hydrogen is liberated from water with oxygen as a byproduct, is well understood but more expensive than other methods. The only pollution generated from electrolysis is in generating the power to run the electrolyzers. Therefore, there is much enthusiasm for producing clean hydrogen powered by renewable energy or nuclear power.

According to the DOE report, total announced U.S. commercial clean hydrogen projects in 2024 has increased 26% to planned operational capacity of 14 million metric tons per annum (MMTpa). This is over and above another 3 MMTpa of capacity from the DOE’s Regional Clean Hydrogen Hubs (H2Hubs) program. Such planned capacity is expected to result in an operational capacity of 7-9 MMTpa in the U.S. by 2030.

About 60% of total announced capacity (7.9 MMTpa) comes from carbon reformation projects using carbon capture and sequestration, the report said. About 40% (6 MMTpa) comes from electrolysis. A small amount comes from other techniques, such as methane pyrolysis.

The report noted that the majority of these new projects are in the early stages and that there was little movement in late-stage projects. The authors put this down to increased production costs, particularly for electrolysis, uncertainty about upcoming government rules and tax breaks and a lack of off-takers. These factors have been noted by industry analysts, who add that the increasing availability of low-cost electrolyzers from China are spurring larger scale projects in other parts of the world.

The main markets for clean hydrogen will continue to be the main users of conventionally produced hydrogen in the industrial and agricultural sectors, the DOE report said, particularly where production can be co-located with consumption. Storage and transport of hydrogen remain significant barriers to its widespread adoption throughout the economy.

While automotive, public transportation trucking and other mobility sectors are a key goal for many advocates of the hydrogen economy, the report stressed that these might require additional cost reductions and infrastructure build-out so that liftoff can occur in the 2030s. At the same time, 2024 did see some clean hydrogen transportation projects getting off the ground, such Avina Clean Hydrogen’s facility near Long Beach, California, that will produce green hydrogen refuel trucks running on fuel cells serving the port.

More widespread movement toward a commercial liftoff for clean hydrogen will benefit from new rules regarding the clean hydrogen production tax credit (IRA 45V) and additional technological development, the report said.

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