Why Hydrogen’s Big US Push Just Slowed Down

Exxon pauses a major project as demand lags, prompting broader reassessment across the emerging US hydrogen market

11 Dec 2025

The US hydrogen sector is entering a period of reassessment as companies adjust expectations for a market once expected to scale quickly on the back of federal support and industrial demand. A series of project delays, softer customer interest and uncertain policy timelines is prompting developers to revise plans and adopt more cautious strategies.

ExxonMobil’s decision to halt work on its proposed blue hydrogen project in Baytown, Texas, has become the clearest sign of this shift. The company paused development after failing to secure firm commitments from prospective buyers, a setback for a project initially viewed as a key driver of early adoption. Analysts say the move highlights a broader recognition that hydrogen demand is forming more slowly than many forecasts had assumed.

Other companies are also adjusting. Air Products is in talks with Yara over possible partnerships linked to long-term hydrogen and ammonia supply. Such arrangements are seen as a way to stabilise revenue expectations while overall market formation remains uncertain. Technology groups including Bloom Energy continue to develop systems capable of using hydrogen, positioning themselves for future uptake even if these efforts have not yet translated into explicit strategy changes tied to the market reset.

Analysts argue the sector is refining its approach rather than retreating. Expectations that federally backed hydrogen hubs would speed deployment have been tempered by shifting schedules and regulatory complexities. The reassessment, they say, may encourage more disciplined investment, closer alignment with customer needs and clearer visibility on the most viable applications.

Companies are now reviewing project scale, exploring new partnerships and advancing technologies that can expand once demand strengthens. For industrial users evaluating hydrogen, the current slowdown offers a more realistic view of how the market may develop.

The outlook will depend on firmer policy guidance, rising demand from sectors such as chemicals and heavy transport, and continued innovation. While uncertainties persist, recent adjustments suggest the sector is moving towards a more measured path that could support faster growth when conditions improve.