The sector has moved from a period of intense hype, fueled by net-zero goals and lobbying, to a sobering reality check. This "trough of disillusionment" is defined by project cancellations, missed targets, and a backlash against hydrogen as a universal energy solution.
Governments in the EU and US set ambitious targets and incentives, but implementation has been slow, rules have been delayed or changed, and mandates are often ignored. This has failed to create the necessary demand to drive the market forward.
While Western markets are scaling back expectations, China and India are emerging as the most promising regions for hydrogen development. China's inclusion of hydrogen in its Five-Year Plan and India's focus on domestic use signal strong state-level commitment, creating a potential upside to global forecasts.
The market is abandoning the idea of hydrogen as a panacea and focusing on specific, hard-to-abate sectors. The most viable use cases are in existing applications (refining, fertilizers) and new ones like steelmaking, while speculative uses in transport or power face significant economic and physical challenges.
Keep pulling the thread on Martin Tengler.