Hydrogen Heats Up: Two Deals Spark US Clean Energy Race

Primary Hydrogen’s asset buy and United Hydrogen’s SPAC move signal momentum ahead of tighter US tax credit rules

21 Mar 2025

Two major developments in the US hydrogen sector have drawn investor attention as the industry approaches key federal policy deadlines. Primary Hydrogen has acquired the Dove Creek project in Colorado, securing rights to a natural hydrogen reservoir with promising geophysical signals. The company believes the site could enable scalable production of subsurface hydrogen, offering an alternative to electrolysis-based methods dependent on renewable power.

The deal, completed in March, gives Primary Hydrogen access to the Paradox Basin, where early studies suggest natural hydrogen may be migrating through rock faults. The company is betting that these geological formations can support long-term production and reduce reliance on costly infrastructure associated with green hydrogen.

Separately, United Hydrogen is progressing with a $1.3bn reverse merger with Aimei Health Technology, a special-purpose acquisition company (SPAC). The updated agreement, filed in June, maintains plans for a Nasdaq listing in the third quarter of 2025.

Both transactions come as hydrogen developers face narrowing eligibility for US clean energy tax credits under the Inflation Reduction Act. Tighter rules, due to take effect later this year, have added pressure on firms to secure financing and prove project viability.

The sector is also contending with rising material costs and logistical challenges. Analysts say companies that can lock in reserves and capital early are likely to shape the future supply landscape. Pipeline operators have begun assessing whether geologically sourced hydrogen can be blended into existing transport networks, while suppliers are adapting compression and storage equipment for such sources.

Efforts are under way to develop industry protocols for managing natural hydrogen safely, although gaps in permitting and subsurface regulation remain.

Despite these obstacles, the pace of activity suggests that early entrants like Primary and United Hydrogen are positioning themselves to lead in a maturing market. Whether these moves prompt broader investment across the hydrogen value chain remains to be seen.