Hydrogen projects keep getting built while the buyers stay missing

Buyers in steel, chemicals and refining ask whether subsidised demand and new pipelines make green hydrogen affordable. For taxpayers and regulators, the risk runs the other way: stranded pipelines and electrolysers if demand forecasts keep falling.

A plant tops out, the customers have not signed

ChinaCoal Pingshuo has topped out the electrolyser plant for its 600,000 kW off-grid hydrogen project in Shanxi, according to a report published on 3 November 2026. The company calls the unit the first step in a wider low-carbon olefins plan. The plant sits on subsided coal mine land in Shuozhou and follows a solar power, electrolysis, ammonia synthesis route. Green hydrogen replaces grey hydrogen made from coal or gas in the chemical chain. The company describes the wider coal-to-olefins complex as the largest single coal chemical project in Shanxi by investment. The design calls for 2.2 million tonnes a year of methanol, converted into 1 million tonnes of olefins. Full operation should cut carbon dioxide emissions.

Conventional coal chemical hydrogen production emits roughly 10 to 12 kg of CO2 per kg of hydrogen. Green hydrogen is close to zero.

The project skips large-scale storage and lets the electrolysers absorb variable solar output directly.

Beijing starts paying for demand

China approved four-year hydrogen programmes covering five regional city clusters, with central incentives of up to 8 billion yuan, about $1.1 billion. Chinese authorities announced the programme in October. Each cluster can receive up to 1.6 billion yuan over four years. The grants require expanding hydrogen use in industrial processes, fuel-cell vehicles and related infrastructure.

The design addresses the industry's central problem: production capacity is growing faster than the customers willing to buy the fuel at commercially viable prices.

China's starting position is large. The Hydrogen Council's Global Hydrogen Compass 2026 identifies the country as the world's largest market for committed renewable hydrogen capacity, more than half the global total.

The global gap between committed and running

Worldwide, committed clean hydrogen investment has reached $130 billion across more than 570 projects, equal to 6.9 million tonnes of annual production capacity. That is the supply side. Only around 1.7 million tonnes of that capacity is operational, and binding purchase agreements cover approximately 4.2 million tonnes a year. The difference between committed production capacity and contracted demand illustrates the commercial uncertainty facing developers, particularly those planning projects dependent on future export markets.

Europe's pipeline arrives before its business case

Germany's hydrogen backbone reached a milestone on 4 August 2026. RWE and its partners said renewable hydrogen produced during commissioning at Lingen had reached Marl Chemical Park, roughly 120 kilometres away.

The announcement did not disclose the quantity received at Marl, the price paid by an industrial customer, or which existing hydrogen production was displaced. Marl has used hydrogen for decades in integrated processes, so a second source does not by itself create new demand for a more expensive feedstock. Germany's approved hydrogen core network covers 9,040 kilometres, with expected investment costs of €18.9 billion, much of it converted gas pipelines. Those are approved plans, not built pipe, and not committed customers.

RWE has a 15-year agreement to supply TotalEnergies' Leuna refinery with about 30,000 tonnes of renewable hydrogen a year from 2030, at an undisclosed price.

The planning assumptions behind such deals are shrinking. ENTSOG's October 2026 draft cut its 2030 hydrogen demand assumption from 620 TWh to 335 TWh, 46% below its 2024 assessment. Its 2040 figure fell 33%, from 1,929 TWh to 1,296 TWh. A modelled delivered cost through the Lingen system is about €9.06/kg after assumed capital support, against a €3/kg conventional benchmark. The European Investment Bank called for an integrated European clean hydrogen market, citing disparities in production, demand and investment between member states.

Capital still flows to the supply side

Supply keeps attracting money. CMMZE Energy Namibia approved a final investment decision at the end of September 2026 for a N$17 billion green hydrogen and ammonia project at Henties Bay. The facility will produce 35,000 tonnes of green hydrogen a year, converted into 210,000 tonnes of green ammonia. It will run independently of the main grid, with its own renewable plant on site. The coastal site will serve as a direct loading point for ammonia shipped to European Union destinations. Financing and commercial viability remain untested.

Public money is following. The Green Climate Fund approved $140 million at its 46th board meeting in Songdo, South Korea. Of that, $56 million goes to Namibia's SDG Namibia One Fund and $84 million to South Africa's SA-H2 Fund. The money is blended finance, meant to pull in private capital.

Companies are signing equipment contracts too. Técnicas Reunidas won a contract announced on 28 October 2026 to supply two hydrogen reformers for Dangote's Gode fertilizer complex in Ethiopia. The two units have a combined capacity above 200,000 normal cubic metres of hydrogen per hour. The complex will produce up to 3 million tonnes of urea a year and will use Ethiopia's natural gas, so the hydrogen is not green. Its purpose is import substitution, not decarbonisation.

Mantle8 and Hydrogen Europe handed over an open letter in Brussels on 28 October 2026 asking the EU to recognise natural hydrogen. The letter proposes a €1 billion envelope for around 50 exploration and appraisal wells across at least 10 member states. The European Commission's call for evidence, launched on 26 October, explicitly references natural hydrogen.