An analysis of how regulation and tax incentives are driving the growth of blue hydrogen amid the slowdown in green hydrogen by 2030.
Growth projections for the clean hydrogen market suggest that the mix of technologies for industrial decarbonization will undergo a significant structural adjustment by 2030. The evolution of regulatory frameworks and the reallocation of government subsidies in North America have slowed the progress of renewable-source electrolytic developments. Consequently, the energy industry is focusing its investments on adapting existing infrastructure to scale up energy carrier production using carbon capture and storage methods.
The impact of public policies on green hydrogen
The budget cuts implemented in US energy policy altered the pace of execution of major clean energy projects. Specifically, in 2025, the US Department of Energy (DOE) substantially reduced federal funding allocated to strategic development centers, including the ARCHES initiative in California and the Pacific Northwest consortium in the Pacific Northwest. These regional platforms formed the operational core of the largest investments in clean energy renewable hydrogen on the continent. Therefore, the withdrawal of direct subsidies affected the financial viability of the planned facilities.
Clarice Brambilla, an energy transition analyst at the market intelligence firm GlobalData, highlighted that government regulations determine the supply and demand dynamics in this technology sector. Consequently, changes in financial support schemes explain both the initial surge experienced by the region and the subsequent slowdown in the pace of electrolysis plant installations. Thus, uncertainty surrounding tax breaks for hydrogen from entirely clean sources redirected capital flows toward lower-cost operating options.
Blue hydrogen leadership driven by the 45Q credit
The passage of the OBBBA legislation brought certainty to the decarbonization pathway from fossil fuels with emissions capture. The legislation preserved the benefits associated with the 45Q tax credit, which incentivizes the underground capture and storage of carbon dioxide. This regulatory stability also gives blue hydrogen a competitive advantage over capital-intensive renewable alternatives. Therefore, the chemical and petrochemical industries are prioritizing the use of tax incentives already established within the legal framework.
Market research firm GlobalData predicts that the expansion of supply capacity in North America will come primarily from the retrofitting of mature industrial facilities. In this context, integrating carbon capture units into ammonia synthesis plants is a more viable option hydrogen plants in operation rather than building entirely new infrastructure. Thus, reusing industrial assets optimizes start-up times and reduces capital expenditures. Consequently, the refined natural gas-based energy vector will maintain its commercial dominance in the medium term.
Global outlook for the energy mix towards 2030
The transition to a decarbonized energy mix will require the coexistence of different generation technologies adapted to the economic realities of each region. While electrolysis projects face challenges related to the cost of electricity and the membrane supply chain, carbon capture offers an immediate scaling path for heavy industry. Thus, the net-zero targets set for the next decade will depend on regulatory flexibility to integrate both technological alternatives. Consequently, the consolidation of the clean hydrogen market will rely on cost optimization and continued fiscal support.
Source: GlobalData
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