Market Expansion

Hydrogen is a strategic economic and energy opportunity to expand America’s industrial base, energy security, and global leadership. Despite good progress made in the past several years, the US hydrogen industry faces headwinds and slow scale up. The more its market lags, the more it risks falling behind other countries actively building markets and securing supply chains.

This report explores the conditions stalling US hydrogen market growth, including weak domestic demand caused by fragmented policies and challenged economics in many domestic offtake sectors. With case studies for hydrogen in exports, on-road mobility, aviation, steel, and maritime shipping, it highlights the early wins and remaining steps to accelerate market development.

Federal and state policy makers can put America on a path to unleash widespread hydrogen investments and solidify energy leadership by considering the following actions: retain current federal incentives, promote development of the exports market, increase demand-side policy incentives for hydrogen and its derivative commodities, and strengthen infrastructure policy supports.

Published in March 2025 by the Hydrogen Council 
Copies of this document are available upon request or can be downloaded from our website:www.hydrogencouncil.com 

This report was authored by the Hydrogen Council in collaboration with McKinsey & Company. The authors of the report
confirm that:
1. There are no recommendations and / or any measures and / or trajectories within the report that could be interpreted
as standards or as any other form of (suggested) coordination between the participants of the study referred to within
the report that would infringe the EU competition law; and
2. It is not their intention that any such form of coordination will be adopted.
The calculations in this analysis were conducted based on regulations effective as of January 1, 2025. This analysis
does not include calculations or hypothetical ranges based on future regulatory uncertainty or transitory trade
measures (e.g., tariffs), nor does it seek to make any specific policy recommendations. It offers instead an estimate of
the impacts of existing regulations on clean hydrogen demand and an indication of the cost and infrastructure gap that
remains for other sub-sectors of potential 2030 clean hydrogen demand.
In this report, renewable hydrogen refers to hydrogen produced from renewable energy sources via water electrolysis.
Low-carbon hydrogen refers to hydrogen produced with low-emissions technologies with significantly lower
greenhouse gas emissions impact than conventional production pathways, based on robust life-cycle analysis-based
methodologies for GHG emissions assessment. This includes i) hydrogen produced using natural gas as a feedstock
with SMR or ATR coupled with CCS; ii) hydrogen produced through pyrolysis of natural gas into hydrogen and solid
carbon; iii) hydrogen produced through gasification of coal with CCS; iv) hydrogen produced through electrolysis using
electricity of non-renewable origin as feedstock. Renewable and low-carbon hydrogen are collectively referred to as
“clean hydrogen”. Grey hydrogen refers to hydrogen produced from unabated fossil fuels.
We recognize the varying national and regional approaches to GHG emissions intensity thresholds or bands and the
criteria for qualifying hydrogen as ‘clean’,  ‘low-carbon’,  ‘renewable’,  ‘sustainable’,  ‘low-emission’ adopted across
jurisdictions.
Whilst the contents of the report and its abstract implications for the industry generally can be discussed once they
have been prepared, individual strategies remain proprietary, confidential, and the responsibility of each participant.
Participants are reminded that, as part of the invariable practice of the Hydrogen Council and the EU competition law
obligations to which membership activities are subject, such strategic and confidential information must not be shared
or coordinated – including as part of this report.