Wood Mackenzie predicts 2025 to be a pivotal year for low-carbon hydrogen and ammonia sectors, despite challenges like cost pressures and regulatory complexities. Key themes include the rise of blue hydrogen in the US, a giga-scale green project reaching FID, increased deployment of Chinese electrolysers, a mismatch between project FIDs and offtake contracts, and a surge in low-carbon ammonia investments. These developments are expected to shape the sector's future, reported Energy Connects.

Under the second Trump administration, the US is expected to solidify its position as a blue-focused hydrogen market, with over 1.5 Mtpa of blue hydrogen capacity reaching FID in 2025, a significant increase from the weakened outlook of green hydrogen.

"We predict that the 45Q tax credit will remain in place due to strong support from the oil and gas lobby, and its importance in facilitating US exports of blue ammonia," said Greig Boulstridge, research analyst for Wood Mackenzie. "As a result, we predict that a surge in blue hydrogen investment – with at least three large-scale blue hydrogen projects reaching FID – will see the US emerge as the world's leading blue hydrogen producer. On the other hand, we predict that green hydrogen development will face significant headwinds in 2025, with FIDs continuing to disappoint."

To date, 16GWe of green capacity has reached FID, but only two of these projects are larger than 1GWe. "The path to successful large-scale FIDs is not straightforward," said Monica Trilho, research analyst for Wood Mackenzie. "Key factors such as securing offtakers, access to renewable energy, favourable regulatory environments, and government subsidies are critical for projects to move forward.

"Despite the challenges, we anticipate the continued push of giga-scale green hydrogen projects. Over 150 projects have been proposed with +1GWe, but the majority are longer-term or unlikely to materialise. However, we do anticipate at least one more giga-scale FID expected to be announced in 2025."