Global hydrogen output is dominated by fossil-based supply, while low-emissions hydrogen remains a small fraction of total production. That imbalance is the simplest explanation for why the sector’s current correction is not primarily a technology story. It is a capital allocation and policy credibility story, with delivered molecule cost and infrastructure execution doing most of the damage. Ryan Sookhoo frames the moment as a regional slowdown rather than a universal collapse.
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Policy volatility is the first-order shock, not chemistry
Sookhoo’s causal argument is straightforward: a U.S. federal shift in energy posture created second-order waves across global hydrogen planning. Hydrogen investment is unusually sensitive to policy because most projects are option value plays until rules harden. When eligibility criteria, emissions accounting, and compliance mechanics shift, the cost of capital rises immediately, and marginal projects slip out of the investable set.
This matters well beyond the U.S. because global OEMs, developers, and financiers do not treat jurisdictions in isolation. They compare bankability. In practice, policy credibility becomes a hidden discount rate. You can have generous subsidies on paper and still lose projects if the compliance pathway looks brittle, slow, or politically reversible. Sookhoo’s pond analogy lands because hydrogen is a system investment, and system investments hate uncertainty.
The correction is a demand timing problem
Hydrogen demand today is still concentrated in refining and chemicals. That implies the largest near term decarbonisation lever is not persuading new sectors to adopt hydrogen, but cleaning up the hydrogen already used at scale. Sookhoo’s point that fuel cells should not be expected to “pull” green hydrogen is the same logic expressed differently: fuel cells are not the center of mass of the hydrogen market, so designing the entire supply narrative around them distorts priorities.
This is where many corporate strategies misfired. They chased the most visible use case, road mobility, before the system solved the less visible prerequisite, low-cost, reliable distribution. The result is the classic valley of death: stations and logistics built ahead of utilization, thin networks that break under stress, and retail pricing that destroys adoption momentum.
The delivered fuel cost is the binding constraint for mobility
Sookhoo is blunt that fuel cell drivetrains are not the core limiter. The value proposition collapses when the molecule is expensive at the nozzle. The key analytical point is that retail hydrogen pricing can be dominated by delivery, compression, storage, station capex recovery, and network reliability rather than the marginal cost of production.
That is why the argument “electrolysers will get cheaper” is not sufficient to rescue mobility economics. Even if production costs fall, the adoption curve will not appear if distribution remains high-friction and high markup. Sookhoo’s line that you can give someone a fuel cell for free is not hyperbole. If fuel costs dominate the total cost of ownership, the hardware becomes secondary.
For heavy-duty, the constraint is even tighter. Freight is a low-margin business. It cannot absorb a sustained fuel cost multiple versus diesel without either a regulatory regime that functions like a mandate or an operating advantage strong enough to compensate. Sookhoo’s thesis is that heavy-duty still fits fuel cells because the operational profile can remain close to diesel, fast refueling, and long run time, but only if delivered fuel costs move toward a commercially tolerable band.
Infrastructure is the OEM’s risk, and it is underpriced in strategy decks
When asked what blocks adoption from an OEM perspective, Sookhoo points to infrastructure rather than customer openness. That aligns with how OEMs evaluate rollout risk: selling vehicles into a thin or unreliable fueling network is reputationally toxic and financially dangerous. EV adoption had a structural advantage because home charging bypassed public network dependency for many users. Hydrogen cannot replicate that for most customers, which makes network reliability part of the product, not a supporting detail.
The economic feedback loop is brutal. A fragile network reduces utilization. Lower utilization worsens unit economics. Worsened unit economics drive higher retail pricing. Higher retail pricing suppresses demand further. This is not solved by better stacks. It is solved by industrial-scale logistics, clustered demand, and high utilization anchored by fleets or stationary users.
Where hydrogen remains defensible is where the buyer is paying for resilience
Sookhoo argues that the most defensible fuel cell use cases are not trying to beat diesel on a simplistic energy cost basis. They are high-value power users who pay for uptime, resilience, and sometimes emissions compliance, including ports and data centers.
This framing is economically coherent. In markets where the value of lost load is high, buyers will tolerate higher fuel costs if reliability is superior, if regulatory exposure is reduced, or if the alternative is costly downtime. In those contexts, hydrogen fuel cells become an infrastructure and risk product as much as an energy product.
The strategic implication is uncomfortable for parts of the ecosystem: the scalable near term path may look less like mass mobility and more like industrial power, backup, and clustered operations, because those segments can create the utilization needed to pull down delivered cost through volume and more efficient distribution.
Stop bundling electrolysers and fuel cells as one business story
One of the most operationally useful points in the interview is Sookhoo’s insistence on separating electrolysers and fuel cells in strategy. Electrolysers are an energy supply and industrial feedstock tool. Fuel cells are a power conversion tool competing in electrification architectures.
Bundling them produced two persistent errors.
First, assuming that accelerating electrolyser deployment automatically fixes fuel cell economics. It does not if the cost driver is distribution, station capex, or retail supply chain structure. Second, forcing a single green-only narrative onto all use cases before the supply chain is scalable. That raises costs, narrows optionality, and can slow adoption by turning hydrogen into a policy artifact instead of a competitive energy pathway.
Policy makers face a sequencing problem, not a purity problem
Sookhoo’s critique of forcing green hydrogen before viable business models is a sequencing argument. If the objective is system-scale decarbonisation, the transition pathway has to manage lock-in risks without choking early infrastructure buildout. That means policy should focus on credible lifecycle accounting, practical compliance, and a pathway that investors can underwrite without assuming that today’s rules survive tomorrow’s election.
His point about political cycles resetting policy direction is not theoretical. When energy becomes a proxy battle, markets respond by demanding higher returns or stepping away entirely. Hydrogen projects that only work in one political regime are fragile. The projects and companies most likely to survive the reset are those that can sell into applications with intrinsic value, where delivered fuel cost can be justified by uptime, compliance, or operational fit, even when subsidies fluctuate.
What startups tend to miss is time and the cost of waiting
Sookhoo’s “Hydrogenics era” lesson is patience, but it is not motivational fluff. It is a reminder that stack durability, supply chain maturity, and infrastructure deployment are measured in years and decades, not quarters. Startups operating as if policy will stay generous and demand will arrive on schedule are effectively exposed to short-term volatility. The last two years punished that posture.
A more disciplined play in this phase is industrialization, not evangelism. Pick segments where fueling can be centralized, utilization can be high, and serviceability is designed in. Treat production cost reductions as necessary but insufficient. If delivered fuel cost stays high and infrastructure remains fragile, the best stacks in the world will still lose in the market.
