US Poised to Become Global Leader in Clean Hydrogen Production
According to reporting from Cipher, the United States is projected to become the world’s top clean hydrogen producer by next year, surpassing China, according to BloombergNEF’s latest projections shared with the reporters. This development highlights the U.S.’s significant role in the global transition to sustainable energy.
Governments worldwide, including the U.S., are investing heavily in clean hydrogen, viewed as a crucial alternative to fossil fuels in industries like steel, cement, shipping, and long-haul transportation. The U.S. is focusing on clean hydrogen production methods such as electrolysis (using renewable energy to split water) and natural gas with carbon capture and storage (CCS).
Cipher’s Cleantech Tracker reports that clean hydrogen production is attracting the most investment in the U.S. among emerging clean technologies. However, the U.S. is not yet on track to meet the Biden administration’s goal of producing 10 million metric tons of clean hydrogen annually by 2030, with BloombergNEF predicting only 6 million metric tons by that year.
Adithya Bhashyam, a BNEF hydrogen analyst, notes that the U.S. will supply 87% of North America’s clean hydrogen over the next six years. Despite China currently producing three times more clean hydrogen than the U.S., U.S. production could surpass China’s next year and potentially double it by the decade’s end.
However, China’s unspecified future hydrogen production targets could shift this balance. U.S. projections also depend on forthcoming federal guidelines for tax credits under the 2022 Inflation Reduction Act, expected later this year.
Nearly 80% of the U.S. clean hydrogen supply is expected to come from natural gas with CCS, driven by advanced projects and significant CCS tax credits, with companies like Air Liquide and CIF Industries leading these efforts. Conversely, fewer projects utilize renewable-powered electrolysis, pending final government guidance.
Projections could change if ExxonMobil withdraws its Texas clean hydrogen project due to unfavorable tax credits, as this project represents 14% of the total U.S. projected supply. The clean hydrogen sector is poised for significant developments, indicating a dynamic and evolving future.