[SMM Analysis] In-Depth Analysis of the "Halving" Phenomenon in Green Hydrogen Projects: The Economic Crossroads Facing the Global Hydrogen Energy Industry

I. A Comprehensive Overview of Global Hydrogen Projects Being "Halved"

(I) US Market:

As a key player in the global hydrogen industry, the US has recently seen particularly frequent project adjustments. PlugPower officially announced the suspension of six large-scale green hydrogen projects under construction in Texas, New York, and other locations. During the Q3 2025 earnings call, the company clearly stated that this decision stems from "economic feasibility issues" and "changes in market conditions." CEO Andy Marsh emphasized that funds will be reallocated to the faster-returning data center backup power supply market, a strategic shift that also indirectly reflects the profitability pressures facing green hydrogen projects.

(II) Chinese Market:

China's green hydrogen projects have also shown a clear adjustment trend. The Guoneng Alxa High-tech Zone Million Kilowatt Wind and Solar Power Hydrogen Ammonia + Infrastructure Integrated Low-Carbon Park Demonstration Project also announced it would voluntarily relinquish its construction quota, explicitly stating that "given the current decline in the green ammonia market price, the project's economics do not meet expectations, fail to satisfy the group company's requirements, and prevent full-capacity grid connection as approved."

The cancellation of these projects reflects the practical challenges China's green hydrogen industry faces in scaling up. The massive investments required for integrated wind-solar-hydrogen-ammonia projects impose stricter demands on the return on investment. When market conditions cannot meet profitability expectations, enterprises rationally choose to exit proactively.

(III) Global Scope:

Beyond the Chinese and US markets, green hydrogen projects in many other regions have also scaled back capacity or contracted their geographical footprint due to various issues. Australia's Fortescue announced cuts to its Australian hydrogen R&D spending and layoffs, shifting resources to international markets like Morocco and Brazil. The UAE's Masdar redirected "billions of US dollars" in green hydrogen investment towards AI and data centers, with the power from its $6 billion desert solar project now being diverted to data centers. Spain's Catalina project reduced its 2030 green hydrogen production capacity target by 63%. German energy giant E.ON canceled a domestic 20 MW green hydrogen project and withdrew from the H₂Ruhr pipeline plan.

II. Four Root Causes of Green Hydrogen Projects Being "Halved"

(I) Cost "Ceiling": The Price Gap Between Green and Conventional Hydrogen is Difficult to Bridge

Lack of price competitiveness is the most critical reason for the cooling interest in green hydrogen projects. Currently, there is a significant gap between the global production cost of green hydrogen and that of conventional gray hydrogen, with green hydrogen priced about three times higher than gray hydrogen. This price spread deters downstream users in industries like industry and transportation.

(II) Market Demand "Vacuum": Downstream Applications Have Yet to Form a Scale-Driven Boost

The development of the green hydrogen industry relies on effective uptake from downstream markets. However, global demand for green hydrogen has not yet reached a scale-driven growth phase, leading to a widespread dilemma of "having capacity but no market." The industrial sector, as the largest consumer of hydrogen, includes enterprises in steel and chemical industries that, due to cost pressure, still predominantly rely on conventional gray hydrogen and exhibit low acceptance of green hydrogen. The lack of long-term, stable off-take agreements has become a direct cause for the cancellation of many projects.

(III) Policy "Flip-Flop": Subsidy Phase-Outs and Regulatory Uncertainty Heighten Investment Risks

Policy support is a crucial driver in the early stages of the green hydrogen industry. However, recent adjustments to hydrogen policies in many parts of the world have severely undermined corporate investment confidence. The early termination of the US 45V tax credit policy caused some projects to shift directly from profitability to losses. At the same time, the complexity of the tax credit calculation methods made it difficult for many projects to meet subsidy conditions, further reducing the policy's attractiveness.

In the EU, although the hydrogen strategy is still advancing, policy orientation is gradually becoming more cautious. Other countries have also adjusted their hydrogen policies, shifting from aggressive expansion to rational investment.

(IV) Funding "Cutoff": Dual Constraints of Long Investment Return Cycles and Financing Pressure

Green hydrogen projects are characterized by large investment scales and long payback periods, which conflict with the capital market's preference for short-term returns. Excessively long return cycles deter many investors.

III. Common Characteristics of "Surviving" Projects: Key Elements for Economic Viability

Against the backdrop of widespread cancellation of global green hydrogen projects, some projects continue to advance. Most of these projects are located in regions rich in renewable energy, such as the Middle East and North Africa, where abundant solar and wind resources significantly reduce electricity costs. At the same time, these projects are often situated close to major hydrogen users like steel and chemical plants, reducing transportation costs and creating a model of "local production, local consumption," effectively enhancing project economics.

IV. Conclusion: Darkness Before Dawn—The Green Hydrogen Industry Needs Rational Breakthroughs

The phenomenon of green hydrogen project cancellations is not a signal of industry decline but rather the inevitable growing pains as the sector transitions from proof-of-concept to commercialization. The core challenges currently facing the global green hydrogen industry essentially stem from mismatches among technological maturity, cost competitiveness, market demand, and policy support. However, from the perspective of the broader energy transition trend, green hydrogen is an inevitable path. There is no need to rush, nor to be overly disappointed. Proceed calmly and rationally to break through the impasse.