Hydrogen Investments Are Coming, but North America Is Behind the Curve, IIR Data Show

Some $16.5 billion in investments could go toward various forms of hydrogen production across North America, helping to support efforts to lower emissions, though the region is far behind the rest of the world, research from Industrial Info found.

There are nearly $20 billion in funds available from both the bipartisan infrastructure bill that passed through Congress last year and President Joe Biden's signature Inflation Reduction Act.

Hydrogen is the most abundant element in the universe and a potent energy carrier. U.S. Energy Secretary Jennifer Granholm in early June described hydrogen as the "Swiss army knife" of decarbonization strategies.

"If we get it right, it can do just about everything," she said.

Through various programs, including the so-called Hydrogen Shot, the Biden administration set a goal of producing 50 million metric tons of hydrogen fuels by 2050, which in theory could lead to a 10% reduction in greenhouse gas emissions.

Hydrogen production processes are described using a color spectrum. The most common form today is called grey hydrogen, which splits natural gas (CH4) into its elemental components. An emerging, and far cleaner method, dubbed green hydrogen uses renewable power to drive an electric current that can split water (H2O) into its elemental components, with almost zero emissions.

Blue hydrogen, meanwhile, is similar to grey hydrogen, though it utilizes carbon capture technology to address the end-product emissions. Putting all the various blue and green technologies together, Trey Hamblet, a vice president for chemical research at Industrial Info, expects to see $200 billion in investments globally, with more than $60 billion of that going to the North American market.

"Green hydrogen end markets range from transportation fuel cells to broader energy feedstocks," he said. "At IIR, we're tracking around $16.5 billion in green hydrogen spending alone in the U.S. and Canadian markets."

Hamblet said he is monitoring several dozen proposed and potential green hydrogen plants or hubs in the United States, and the bulk of those are seen in PADD 3, the region along the U.S. Gulf Coast.

Meanwhile, there could be close to $12 billion in blue hydrogen developments emerging across North America. Spending there could spill over to the broader carbon capture and storage (CCS) segment as well.

That spending, however, pales in comparison to the rest of the world. Only Europe is spending less than North America on hydrogen developments and Asia is the clear leader with $40 billion in potential green hydrogen investments alone.

The U.S. Energy Information Administration sounds somewhat cautious on hydrogen, noting that it takes more energy to produce it than it provides.

"However, hydrogen is useful as a fuel because it has a high energy content per unit of weight, which is why it is used as a rocket fuel and in fuel cells to produce electricity on some spacecraft," it said. "Hydrogen is not widely used as a fuel now, but it has the potential for greater use in the future."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).