by Tom Mason, Bramble Energy CEO
When Donald Trump’s 2025 return to office was certain, the global community was under no illusion about its impact on Net Zero and clean technology. It has long been known it is not something he believes in with his ‘drill baby drill’ mantra and he certainly wasn’t expected to earmark any significant government spend on climate solutions.
Congress passed the Inflation Reduction Act (IRA) under President Joe Biden, in 2022, aiming to reduce the country’s budget deficit while investing in domestic energy production and manufacturing. It also aimed to make the US more globally competitive in clean energy industries.
Considered the largest investment in climate action in American history, with a highlighted $369 billion to go towards clean energy and climate projects, this has now been put on pause by the Trump administration. In fact, scaling back has already begun. A directive to cease financial support for the development of electric vehicle charging infrastructure and other policies that favour electric vehicles has been issued. Additionally, an executive order halts any further funding from the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA), which respectively offered production tax credits of up to $3/kg and a combined $7bn of funding for seven hydrogen hubs.
What are the consequences of this?
Last year, the CICE (Chambers for Innovation and Clean Energy) carried out a report that found the Inflation Reduction Act has proven to be a positive economic generator, creating 600K jobs and adding over $200B to the economy. It also underscored the economic benefits of clean energy policies, warning that repealing them could jeopardise growth, job creation, and energy independence efforts. It is clear that clean technology companies were seeing multiple benefits and now they will also feel the immediate market effects of a repeal. There will be much more reluctance to invest in some of these energy transition and climate-focused sectors, because the latest political environment has created a much less appealing investment opportunity. In turn, this will have a huge impact on the deployment of climate tech, while companies work out the best route forwards. But, on the other hand, it could also be an opportunity for the market to move away from relying on federal support for the foreseeable future.
While subsidies have played a role in accelerating hydrogen innovation – as we have seen with other clean technologies before it – the future of the sector must be secured through diversified funding strategies, including private investment, industry partnerships and state-level incentives.
Lessons to learn from other clean technology sectors to secure hydrogen’s future
Other clean energy solutions that have already seen success could provide a blueprint for the green hydrogen sector as it navigates an uncertain future.
● Scale and innovation
As solar and wind have scaled, we have seen a massive reduction in costs, which makes it a more attractive choice for energy aside from its environmental benefits. Technological advancements and improvements in both have helped ramp up the scale in which it could be deployed and hydrogen will be no different. Scaling up electrolyser production, improving fuel cell efficiency, and optimising infrastructure deployment will all help reduce costs, making it much more accessible.
● Building investment confidence
The solar and wind industries started to see institutional investors sit up and take notice as capacity grew globally, especially in regions with abundant resources. This in turn unlocked rapid expansion of both technologies and helped create a confidence in the market development. Hydrogen would also benefit from contracts such as the Power Purchase Agreement, which has offered the opportunity for businesses – large and small – to access renewable energy without the need for significant upfront investments in energy infrastructure.
● Focus on infrastructure development
Frontrunner renewable energy systems such as those in Denmark, Ireland, South Australia and Spain show that effective integration is possible today and developing infrastructure in existing systems is crucial to the delivery of climate goals. Energy companies have a vital role to play in pivoting away from fossil fuels and investing in their systems to work and integrate with renewable energies and technologies.
● Localisation of supply chains
In the U.S., mayors, governors, business leaders and others have an incredible amount of agency and power in the system without the arm of Washington, which means by state they could still create impact and vital climate solutions. Developing and investing in domestic manufacturing of electrolyser and fuel cell production – as we have seen in places such as China and Denmark – with other renewables, could reduce costs, create jobs, and enhance energy security.
There is no doubt that subsidies can have hugely positive outcomes on the deployment of maturing technologies. But with the political landscape being tumultuous and uncertain, we must look to other options that can help necessary markets develop at scale and speed.
Lessons from solar and wind energy show that scaling technology, building alternative investor confidence, developing infrastructure, and strengthening supply chains are all essential to making a clean energy source commercially viable. With the rollback of federal support under the Trump administration presenting a pivotal moment for the hydrogen industry, it too must now follow a similar path.
The climate clock is ticking and the sector has a choice: wait for the political tide to turn or push forwards with innovation and market-led solutions that ensure hydrogen’s future. Only the latter approach will secure hydrogen’s role in the global energy transition.
