US Green Hydrogen Market Braces for Bullish Trends in Q1 2024

California (USA): In January, the Green Hydrogen market in the US experienced a price increase, primarily attributed to the rise in energy prices and capex, resulting in elevated production costs. Moreover, heightened market transactions contributed to increased Green Hydrogen downstream inquiries. The demand from the international market remained steady, generating consistent inquiries from overseas markets. On the local manufacturing front, factories maintained a steady production pace, ensuring ample stock in the market. As of December, there were no significant disruptions reported in the supply chain. Furthermore, Green Hydrogen downstream fuel industries exhibited robust demand, contributing to sufficient downstream demand. Additionally, the Federal Interest rate stood at 5.5%, influencing a moderation in the purchasing power of downstream consumers.

Australian officials have found relief in the Biden administration's recent restrictions on accessing incentives for Green Hydrogen investment. There were initial concerns among Australian authorities that easily accessible tax credits in the United States might divert local capital overseas. The new regulations were unveiled just one working day before the Christmas holiday and outline the criteria for obtaining tax credits for green hydrogen projects under the Inflation Reduction Act, which is a key emission reduction policy of the Biden administration. According to the rules, developers can only access tax credits if there is a renewable energy source in the same power grid region, operating simultaneously with the green hydrogen project. The Treasury, overseeing the consultation project, has allowed stakeholders a two-month period to provide comments before finalizing the rules. However, significant criticism has already emerged, with concerns that the rules are excessively stringent and burdensome, potentially hindering developers of Green Hydrogen projects from accessing credits. Andrew Forrest, the billionaire behind Fortescue, expanding his iron ore empire into energy, is among the investors expressing apprehension that these new rules may impede developments in the US.

According to the Chem Analyst Database, the prices of Green Hydrogen in the US market are projected to rise due to heightened market transactions. Additionally, the firming of Natural Gas prices is expected to result in higher production costs in the US. Moreover, there is an anticipation of sustained demand from the international market, driven by an increased global economy. The market is poised for restocking activities, leading to a consistent demand for Green Hydrogen in downstream industries, particularly in the fuel industry. Furthermore, there is an expectation of a decrease in interest rates and an increase in the Purchasing Managers' Index (PMI) value, contributing to an overall optimistic market sentiment for Green Hydrogen.