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In spring of last year, steel giant ArcelorMittal trumpeted a €2.5?billion plan to green its German mills with hydrogen. This June, that plan was shelved despite €1.3?billion in public subsidies on offer[5].

It's not an isolated case. Developers of green hydrogen have scrapped or scaled back projects across Europe, Australia, and beyond as elevated production costs and scant demand undercut the business case[6].

What began as hydrogen hype is yielding to a more sober reality: the economics of green hydrogen remain challenging, and many headline projects are fizzling out before they ever break ground. The list of pullbacks is long and growing.

In Germany, energy firm LEAG indefinitely postponed a flagship "green hub" that was to rise on a former coal plant site[7]. In Norway, Shell abandoned plans for a low-carbon hydrogen plant on the west coast due to a lack of customers, just days after Equinor canceled a similar project[8].

Spain's Repsol slashed its 2030 green hydrogen output target by over 60%, with its CEO citing an industry "heavily reliant on subsidies" and high costs[9]. Even oil majors are retrenching: BP quietly disbanded a team researching hydrogen for transportation[10].

Each withdrawal sends a signal that the hydrogen business, at least for now, isn't closing its commercial gap. Australia, once envisioned as a green hydrogen superpower, has also seen ambitions downscaled.

Woodside Energy, a leading LNG exporter, put two antipodean H? projects on ice last year[11]. Rival Origin Energy pulled out of a hydrogen hub venture in New South Wales[12]. And in July 2024, mining magnate Andrew Forrest slashed his company Fortescue's target output by 2030 from 15 million tonnes to a fraction of that, blaming exorbitant costs and renewable power requirements[13].

More recently, Fortescue went on to cancel two high-profile projects outright – one in Australia, one in Arizona – citing policy uncertainty (particularly a retreat on U.S. renewable support) for making previously feasible projects unviable[14][15]. These high-profile setbacks underscore how quickly boardroom enthusiasm can give way to cold financial logic.

Behind the cancellations is a common calculus. Producing hydrogen by electrolyzing water with renewable electricity is still far more expensive than making it from natural gas (so-called "grey" hydrogen) or even using gas with carbon capture ("blue" hydrogen).

With carbon prices and clean fuel mandates not yet sufficient to bridge that cost gap, many planned green hydrogen facilities simply don't have paying customers. "Elevated production costs and weak demand for the low-carbon fuel have made many ventures unviable," Reuters reported, summing up the industry's dilemma[6].

In Europe, complex regulations and uncertainty over rules for what counts as "green" have further bogged down investments[16][17]. And in the United States – initially spurred by generous subsidies – a sudden shortening of the federal tax credit horizon (due to new legislation in 2025) is now jeopardizing three-quarters of proposed projects that can't be built in time[2].

Optimists note that not all is bleak. Smaller-scale projects aimed at local industrial offtakers are still moving forward, and government funding in places like the EU (via its Hydrogen Bank auctions) and the U.S.

(via regional hub grants) could yet rescue some plans. Yet the flurry of cancellations has raised hard questions about hydrogen's near-term role. If even deep-pocketed companies – from steelmakers to oil firms – are hitting pause, the path to a "hydrogen economy" looks longer and bumpier than advocates hoped.

For green hydrogen to fulfill its climate promise, costs must come down and stable policy support must endure for decades, not years. Until then, the dream of abundant green hydrogen powering industries worldwide remains just that – a dream deferred, awaiting better economics and stronger political will[6][7].