Growth Opportunities in the North American Hydrogen Industry, 2024-2040

Alternative Hydrogen Becoming a Niche as Offtake Opportunities Become More Concentrated Between Traditional Hydrogen Consumption Industries

The enactment of the One Big Beautiful Bill Act (OBBBA) marks a dramatic shift in US energy policy. The OBBA significantly scales back the Inflation Reduction Act (IRA) tax credit support for wind and solar power, eliminates residential clean energy credit, energy efficiency home improvement credit, and electric vehicle credits, while extending support for fossil sources of energy. For the hydrogen outlook in the US, this action means the development of green hydrogen capacity will likely become more constrained while the 45Q support blue hydrogen development remains unchanged. Meanwhile, in Canada, tax credits for green as well as blue hydrogen remain active without any time constraints. Our latest analysis of North America, including the US and Canada, indicates that total low-carbon hydrogen production will likely reach 3.7 million tonnes by 2030, led by blue hydrogen, followed by green, purple, and bio-based hydrogen, with the US leading from the front. As growth in this market becomes increasingly complex, one of the key enablers for investors and project developers to achieve cost competitiveness with conventional hydrogen will be long-term funding support. While Canada offers tax credits based on emissions intensity and availability up to 2034, the US has restricted the availability of tax credits to projects starting construction by December 2027.

This study outlines how Canada and the US are aligning with their respective national hydrogen strategies through a three-dimensional rating and ranking based on regulatory drivers, market access, and physical market design, followed by long-term production forecasts of different types of hydrogen, an overview of key incumbents across the hydrogen value chain, and the top offtakers in each country's market.