Tariffs, Funding Cuts, and Missed Momentum: Why Hydrogen’s Potential Is Far from Lost

Recent policy decisions threaten to slow the rapid progress toward scaling green hydrogen in the United States. The current administration’s imposition of tariffs on key metals and imported electricity, combined with reduced federal clean energy funding, risks undermining the momentum established by previous efforts to advance hydrogen as a cornerstone of the clean energy transition.

Key Challenges Facing Green Hydrogen Development

• Tariffs on Critical Materials: A 25% tariff on steel, aluminum, and essential components for electrolyzers and fuel cells raises the cost of producing hydrogen infrastructure, complicating efforts to scale domestic manufacturing.
• Uncertainty in Clean Power Imports: Many hydrogen projects in the Northeast depend on clean electricity imported from Canada. Recent policy shifts have created uncertainty around these imports, jeopardizing project viability and timelines.
• Reduced Federal Support: Federal investments in hydrogen hubs, research and development, and incentive programs have slowed, limiting the resources necessary to drive down costs and accelerate deployment.

The Economic Impact

These policy changes have tangible consequences for hydrogen’s cost trajectory. While green hydrogen was on track to reach approximately $2.70 per kilogram by 2029, current projections suggest prices will remain above $3.70 per kilogram—a significant $1 per kilogram increase that threatens cost competitiveness and jeopardizes climate targets.

Seizing the Moment Despite Setbacks

This period of challenge should not prompt withdrawal or hesitation. Instead, it must serve as a strategic inflection point. To sustain and regain momentum, stakeholders should:

• Accelerate R&D Efforts: Invest in research to reduce dependency on critical materials and develop alternative technologies that lower production costs.
• Scale Domestic Supply Chains: Build resilient, localized clean energy supply chains to minimize vulnerability to tariffs and import disruptions.
• Prepare for Policy Shifts: Develop and deploy proven hydrogen technologies now, positioning the industry to capitalize quickly when supportive policies return.

Looking Ahead

Energy markets and policy environments move in cycles. While the current landscape presents challenges, the fundamental promise of hydrogen as a clean, scalable energy carrier remains intact. By doubling down on innovation and infrastructure today, we can ensure that the next wave of hydrogen growth is poised for success.

The opportunity to lead in the hydrogen economy is still within reach—our actions now will determine whether we seize it.