Hydrogen projects by major oil and gas companies are facing cancellations as the sector confronts harsh economic realities, with high production costs ($4-$12/kg) far exceeding traditional fuels ($1-$3/kg) and insufficient real demand, leading to a bubble burst and a pivot towards more practical, integrated industrial applications rather than standalone energy projects. Billions in investments are being pulled from large-scale developments, signaling a shift from hype to market-focused, bankable projects with secure buyers, but some regional efforts, like India's ambitious targets, continue.

Hydrogen projects by major oil and gas companies are facing cancellations as the sector confronts harsh economic realities, with high production costs ($4-$12/kg) far exceeding traditional fuels ($1-$3/kg) and insufficient real demand, leading to a bubble burst and a pivot towards more practical, integrated industrial applications rather than standalone energy projects. Billions in investments are being pulled from large-scale developments, signaling a shift from hype to market-focused, bankable projects with secure buyers, but some regional efforts, like India's ambitious targets, continue. 

Why Projects Are Being Abandoned
Poor Economics: -
Green hydrogen's cost remains high, making it uncompetitive against cheaper, fossil fuel-based hydrogen.
Lack of Buyers: -
Many projects failed to secure firm "offtake" agreements with industrial users, revealing a disconnect between production and real demand.
High Capital Costs:-
 Building large facilities requires massive investment (around $5bn for 200k tons/year), with slow returns and high risks, especially with rising interest rates.
Policy & Grid Issues: -
Regulatory uncertainty and delays in grid connections for renewable power needed for electrolysis hinder progress. 
The Reality Check
Bubble Burst: -
The widespread cancellations signal the end of an overhyped phase, with investors demanding clarity and real economic value.
Focus on Integration: -
The future lies in "industrial symbiosis," integrating hydrogen into existing industrial ecosystems (like refining) rather than standalone energy ventures. 
What's Next
Survival of the Fittest: -
Only projects with captive demand, strong supply chains, and realistic business cases will succeed.
Shifting Priorities: -
The industry is moving from broad decarbonization claims to disciplined, market-driven, and technically feasible solutions, as seen with some European and Australian reversals. 
India's Path
While major projects falter elsewhere, India remains ambitious, targeting significant green hydrogen production by 2030, attracting investment, and launching pilot mobility projects, according to a recent Press Information Bureau release. 
To better understand your interest, are you looking for information on specific projects that were cancelled, or would you like to explore the viable, smaller-scale hydrogen applications that are gaining traction.
MJF Lion ER YK Sharma 

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