Photo courtesy of Think.ing.com
Last year, we expected the hydrogen industry to move beyond hype and into meaningful execution. While the initial excitement has certainly faded, 2025 turned out to be a challenging year for actual project implementation. Around 50 projects have been publicly cancelled, but the real number is higher as many cancellations happen silently. Unexpectedly, cancellations were not limited to paper-only projects. One developer, for example, actually dismantled two hydrogen plants – one in Australia and another in the United States – and returned millions of dollars in government grants, effectively turning the financial support into a liability.
So what will 2026 look like? Here are our top 3 calls.
Call 1: Hydrogen stuck in the pilot phase
Low-carbon hydrogen – either from gas with CCS (blue hydrogen) or from electrolysers with renewable energy (green hydrogen) – continues to hold significant potential for decarbonising high-emission sectors such as steel, plastics, fertilisers, and fuel production for aeroplanes, ships, and trucks. From a chemical standpoint, these applications are feasible, and prominent advisors like Mario Draghi consistently highlight hydrogen’s key role in helping industries reduce their reliance on fossil fuels, and for Europe to become less dependent on energy imports. Nevertheless, the poor economics and transformative changes required – particularly for existing industrial plants – present significant challenges. This underscores that establishing hydrogen as a mainstream commodity is a complex, multi-stage process that will unfold over several decades.
Building a low-carbon hydrogen economy is a multi-stage process
The hydrogen industry’s journey mirrors the stages of childhood. In the ‘baby phase’, the focus is on learning from pilot projects – testing out carbon capture in blue hydrogen, running green hydrogen electrolysers flexibly with renewables, exploring nuclear-powered electrolysers (pink hydrogen), and extracting white hydrogen from underground. It’s also about building electrolysers that use fewer rare metals. The goal at this stage is to figure out what works technically.
Next comes the ‘toddler phase,’ where hydrogen must prove itself as a viable business, requiring solid financial returns for first commercial-scale plants, often with substantial financial support. However, the volume of low-carbon hydrogen produced remains small – insufficient to replace current usage of grey hydrogen.
With established technology and economics, hydrogen enters the ‘teenager phase,’ scaling up production and building infrastructure to reach more industries and regions. Only then can hydrogen start to substitute fossil fuels, potentially facing pushback from fossil fuel interests.
Finally, in the ‘mature phase,’– if cost problems and anti-lobbying forces are overcome, hydrogen could become mainstream, supported by robust regulations and infrastructure. The focus shifts to phasing out old fossil fuel practices, managing workforce transitions, and supporting affected communities.