Key Insights
- Clean hydrogen will move from a speculative buildup to a series of advances built around specific end-use business cases.
- Emerging hydrogen production technology may help more projects pencil out.
- Consolidation of both industry players and project ownership is coming.
The culture of the clean hydrogen sector will settle in 2026 into a pragmatic rhythm of project-based progress. It will be a good year for the many companies working at this interface of chemistry and energy—not as exciting as the boom years of 2022–24, but not as discouraging as 2025, a year of rapid retraction of government support for the sector.
For a few golden years, companies working on hydrogen were scaling up and working hard to get new technologies ready with the idea that customers wanting to make sustainable chemicals and fuels would start buying once low-carbon hydrogen was readily available. Now the dynamic is reversed, and most firms that make clean hydrogen or the equipment used to generate it say they’re ready to deliver projects—but only if a customer will sign long-term offtake agreements.
Still, several firms in that supply chain completed factories recently. In green hydrogen—made by splitting water with renewable electricity—Topsoe inaugurated a solid-oxide electrolysis cell plant in Denmark in November, and Sunfire is mass-producing alkaline cells in Germany. In fossil fuel–derived blue hydrogen, carbon dioxide sequestration wells are coming on line in Europe and the US. Meanwhile, start-ups like Etch Materials as well as multinationals like Huntsman are advancing turquoise hydrogen reactors, which catalytically convert methane into hydrogen and solid elemental carbon.
New technologies that offer lower overall costs or additional income streams will slot into a 2026 investment environment that will be open mainly to projects that make sense without subsidies.
“The clean hydrogen sector is neither collapsing nor taking off in 2026,” says François Le Scornet, an analyst at Carbonexit Consulting. “We will see a shift to the most realistic set of projects that target ammonia, refinery hydrogen replacement, and a handful of early direct-reduced iron steel units. The projects that survive are probably the best structured, backed by a real industrial offtake.”
China will play an increasing role, locking in market share for both electrolyzers and products enabled by low-carbon hydrogen, says Diana Rasner, the chemical and materials lead at the consulting firm Cleantech Group. Though Chinese hydrogen-production equipment has a reputation for lower quality than units made in the European Union or the US, she says, “they are continuing to refine and evolve next-generation materials and efficiencies at breakthrough speeds.”
The government in China has been open about wanting to lead in cleantech, including green hydrogen, especially as the US stumbles. “The commitment to scaling these breakthroughs to commercial relevancy is putting them ahead of the rest of the world,” Rasner says.
In Europe especially, Le Scornet says, “a strategic dilemma has become clear recently: either accept cheaper Chinese equipment for speed or protect a domestic electrolyzer industry at higher cost.”
Europe is emerging as the key region for firms to sell low-carbon hydrogen and its derivatives. The latest revision of the EU’s sustainable fuel mandates includes specific support for “renewable fuels of non-biological origin.” That category includes hydrogen itself, in addition to ammonia and hydrocarbon fuels derived from it, Rasner says. Biofuels, which the EU is embracing as well, also require large volumes of hydrogen to make.
Where decarbonization drives the conversation, industry watchers expect to hear less talk of how low-carbon hydrogen is made and more scrutiny of the greenhouse gas impact of a specific plant, says Andrew Murphy, CEO of Oxford Hydrogen, a start-up developing catalysts for chemical processes that use hydrogen. “End-users and financiers will show less interest in color labels and more interest in verified upstream methane control, local air-quality impacts, and real-world carbon intensity.”
And regarding what will make a bankable project this year, Murphy says the industries are clear: “Chemicals and fuels will consolidate as the real demand anchors.”
Chemical & Engineering News
ISSN 0009-2347
Copyright ©
2026 American Chemical Society
