Despite Government Initiatives Green Hydrogen Prices Narrow in US and European Markets

Throughout November, the price of Green Hydrogen has shown declining trends in the Netherlands and the USA. This development was due to lower demand from downstream industries like the fuel industry against the backdrop of a higher inflation rate and high level of inventories in the market, which further subdued the market performance of Green Hydrogen. However, the PMI value was stated to be below 50 for the US market in November 2023, which indicates a contraction in the manufacturing sector. Furthermore, the price of Natural Gas was stable in both the US and the Netherlands, leading to low-cost support from the energy front. Furthermore, demand from the international market, especially from the European market, was down, thus leading to lower downstream inquiries and overall lower demand pressure from the downstream industries.

Efforts are being made by governments to foster a positive outlook in the investment sector by permitting a diverse range of investments. This is evident in the collective initiatives undertaken by the Government of Oman, Green Hydrogen Oman (Hydrom), Port of Amsterdam, Zenith Energy Terminals, and GasLog. This collective effort aims to assess the feasibility of establishing a supply chain for liquid hydrogen. The goal is to transport eco-friendly Omani Green hydrogen to the Port of Amsterdam and subsequently distribute it across Europe. The Ministry of Energy and Minerals of the Sultanate, in partnership with Hydrogen Oman (Hydrom), has formalized this collaboration through a Joint Study Agreement (JSA) with the Port of Amsterdam, Zenith Energy Terminals, and GasLog. Together, they are dedicated to realizing the world's first commercially viable liquid Green Hydrogen corridor.

The Biden administration in the United States has revealed its proposal to allocate US$7 billion in government funding to establish seven regional Hydrogen Hubs. Fortescue, hailing from Australia, has been selected to commence negotiations for the award, signifying its active role in the development of the Pacific Northwest Green Hydrogen Hub as part of the US OCED.

As per the ChemAnalyst database, 'The prices of Green Hydrogen in the western market are bound to fall in December due to lower demand from the downstream fuel industry performance. Furthermore, from the energy front, the prices of Natural Gas are expected to be stable, leading to further subdued Green Hydrogen Market growth in December. Moreover, in January 2024, the price of Green Hydrogen is expected to recover in both markets amidst an increase in procurement activities and fewer inventories to meet downstream demand. Furthermore, investment in the Green Hydrogen segment is bound to create positive development in the market. In addition, due to limited supply market dynamics, sellers are likely to hold on to inventories, which will eventually lead to even more shortage of inventories in the market.'