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Investment in clean hydrogen ticked up in the first quarter of this year after generally declining since late 2024, data from the Rhodium Group show — but the overall project pipeline is still shrinking.
The sector attracted $400 million in investment between January and March, up 27% compared to the last quarter of 2025, although still down 11% year-over-year.
The majority of those funds were invested in two blue hydrogen projects: Linde’s plant in Beaumont, Texas, which plans to supply hydrogen for ammonia production used in fertilizer and aims to begin production in early 2027; and Wabash Valley Resources’ plant in Indiana, which broke ground in January. And 26% of the funding went to a green hydrogen plant in Utah — jointly developed by Chevron New Energies and Mitsubishi Power — that is nearing completion as of early this year.
Those three sites are rarities in the U.S. clean hydrogen sector, which has otherwise seen a wave of companies either abandoning projects or pivoting to other business strategies as the market outlook dimmed.
Danish manufacturer Topsoe, for example, paused work on its $400 million electrolyzer factory in Richmond, Virginia, in October 2025, and Monarch Energy pivoted from acquiring powered land for electrolyzers to data centers. The Rhodium Group has tallied $9 billion in cancellations since 2018, nearly all of which came from green hydrogen projects.
The industry’s setbacks date back to the Biden administration. After enacting the Inflation Reduction Act in August 2022, the Treasury Department took more than two years to finalize the 45V tax credit rules that defined what qualified as “green” hydrogen. That uncertainty kept bankers at bay and meant few projects broke ground before President Donald Trump took office.
And while the GOP’s One Big Beautiful Bill in July 2025 maintained 45V after an industry lobbying campaign, it will phase it out sooner than the IRA does. A project will have to start construction by 2027 to claim the credit, rather than 2033.
Since October, there’s also been confusion over the Department of Energy funding for seven clean hydrogen hubs after the DOE proposed canceling at least two. In April, the department sent Congress a list of awards the DOE plans to “retain or modify” from the Biden era, which included five hubs in Delaware, Maryland, North Dakota, Ohio, and the Gulf Coast. However, a spot on that list doesn’t guarantee funding.
DOE, in its fiscal 2027 budget request, asked Congress to repurpose $3.5 billion in unobligated funds from the Biden-era bipartisan infrastructure law — which originally authorized spending on hydrogen hubs — for a new “baseload power” initiative. That initiative aims to keep aging coal- and natural-gas plants open that were slated for retirement and finance between 9 and 13 gigawatts of new capacity focused on coal, gas, and geothermal. No appropriations were requested for wind, solar, or hydrogen research and development.
Given the federal pullback and a shortened window to claim clean hydrogen credits, newly announced projects are shrinking. None were announced in the first quarter of 2026, the Rhodium Group found.
Meanwhile, only $5 billion has actually been invested across all hydrogen projects since 2018, even though $63 billion in investment was announced during that period. About 60% of that $5 billion was invested in green hydrogen projects, while the rest flowed to blue hydrogen, meaning projects that use fossil fuels as a feedstock but capture and store the resulting carbon emissions.
The latter technology is criticized by some scientists and climate advocates, who cite 2021 research showing that blue hydrogen emits a comparable amount of greenhouse gases as its traditional “gray” counterpart because adding carbon capture requires more energy — often supplied by fossil gas. Blue hydrogen reduced emissions by just about 9% to 12% compared with gray hydrogen approaches, researchers found.
