Doosan Fuel Cell and Air Products have recently terminated projects collectively valued at over $1 billion, underscoring the complex interplay of regulatory frameworks and market dynamics influencing the hydrogen economy.
Doosan Fuel Cell, a prominent South Korean manufacturer, has canceled three hydrogen fuel cell supply contracts totaling approximately $560 million. Among these, a notable 110 MW supply agreement with Korea Hydro & Nuclear Power Corporation, Kumho Technology, and LS Electric was discontinued due to prolonged delays in securing necessary permits. Doosan attributed this decision to evolving industry conditions, particularly the introduction of the Clean Hydrogen Power Generation Obligation System (CHPS) bidding market, which has reshaped project viability assessments.
Concurrently, U.S.-based Air Products has withdrawn from three major projects, including a planned 35 metric ton per day green liquid hydrogen facility in Massena, New York. This decision was influenced by recent regulatory developments rendering existing hydroelectric power ineligible for the Clean Hydrogen Production Tax Credit (45V), coupled with a slower-than-anticipated growth in the regional hydrogen mobility market. Additionally, Air Products terminated its agreement with World Energy for a Sustainable Aviation Fuel expansion in California and ceased a carbon monoxide production project in Texas, citing unfavorable project economics.
These project cancellations highlight the intricate challenges faced by the hydrogen sector, where regulatory shifts and market readiness critically impact project feasibility. The exclusion of certain energy sources from tax incentives, as seen with the 45V credit, underscores the necessity for developers to navigate a complex policy landscape. Furthermore, the slower development of hydrogen markets, such as mobility, emphasizes the importance of aligning infrastructure investments with market demand to ensure economic viability.
As the hydrogen industry continues to evolve, stakeholders must remain vigilant and adaptable to regulatory changes and market trends that directly influence project success and the broader adoption of hydrogen technologies.
