Fortescue’s recent decision to abandon two major hydrogen-for-energy projects after reaching a Final Investment Decision (FID) serves as an important signal for policymakers around the world, particularly in the UK, which is still pretending its autumn hydrogen strategy update will be evidence led.
These cancellations, one located in Gladstone, Australia, and another in Arizona, represent more than just isolated setbacks. Hydrogen as an energy source, as opposed to its use as an industrial feedstock, is increasingly failing under scrutiny across the globe
US energy policy under the Trump administration, particularly the removal of certain hydrogen-related subsidies, has led to uncertainty which has in turn quickly revealed the true economics of hydrogen production. With the incentives removed, the project’s already tenuous financial viability vanished, prompting Fortescue to write off approximately $150 million in pre-tax losses.
Source: Clean Technica: Read The Article
PSR Analysis: Many companies (including BP, Shell, ArcelorMittal, Iberdrola, and Woodside) have shelved or significantly scaled back major hydrogen-for-energy projects due to escalating costs and market realities. The challenges of hydrogen infrastructure (including storage, distribution, and demand uncertainty), continue to impede growth, despite the generous subsidies previously made available. It should be noted that many hydrogen projects have collapsed once governmental subsidies have been withdrawn or ended. PSR
Guy Youngs is Forecast & Adoption Lead at Power Systems Research
