# Low-carbon hydrogen and e-fuels: Cycles

A policy cycle of hype, delays and cancelled projects

Source page: https://www.materialinsights.org/energy/green_hydrogen_carriers/cycles/

What this tab covers How its prices and margins move: past booms and busts with price levels, the spread or margin that the industry watches, the drivers of the cycle and the metrics to track.

This is a policy cycle, not a price cycle. Announcements surged in 2020-2023 on net-zero pledges and subsidies, then many projects stalled when electrolyser costs stayed high, offtakers would not pay the premium and interest rates rose. Offtake deals fell and several flagship projects were cancelled. Competitive auctions in India in 2025 reset price expectations to about $4.4-4.6/kg. The 2022 European gas spike and the 2026 Hormuz disruption showed that grey hydrogen's cost floor can jump, narrowing the green premium for a time. The binding constraint is a buyer willing or required to pay.
 The spread to watch **Green premium (green minus grey cost)**

India 2025: green hydrogen about $4.4-4.6/kg vs grey about $2.1/kg, a premium of about $2.4/kg; green ammonia about 10-45% above grey at $515/t (hydrogen and ammonia tiles).

#### Booms and busts

1. 2021-2022

European gas rose about tenfold and grey hydrogen briefly cost more than green on paper; announcements multiplied.

Europe gas from $7.27/MMBtu (Jan 2021) to $70.04/MMBtu (Aug 2022), pushing grey hydrogen above $10/kg (World Bank; hydrogen tile, indicative)

2. 2023-2025

Hype turned to delays and cancellations. Offtake signed fell from 2.4 Mt a year (2023) to 1.7 Mt (2024); CF dropped its Donaldsonville electrolyser in December 2025.

electrolyser installed cost stayed at $2,000-2,600/kW outside China (IEA 2024)

3. 2025

India's competitive tenders produced the lowest prices yet for refinery hydrogen and ammonia.

IOCL Panipat Rs 397/kg (about $4.6/kg); Ocior $4.39/kg; SECI green ammonia Rs 49.75-64.74/kg

4. 2026

The Hormuz near-closure raised LNG and ammonia prices; Europe still had no large e-SAF FID despite 2030 mandates.

Japan LNG $11.49 to $15.65/MMBtu (Jan-Apr 2026, World Bank); Tampa ammonia $825/t in May 2026 (ammonia tile); e-SAF EUR 4,000-9,000+/t (PwC)

#### What drives the cycle

- **Mandates and subsidies.** RED III, ReFuelEU, FuelEU, SIGHT and 45V decide whether buyers pay the premium.
- **Renewable power cost and capacity factor.** Electricity is most of the cost; higher utilisation spreads electrolyser capex.
- **Electrolyser cost.** Chinese stacks at $600-1,200/kW are far cheaper than Western ones at $2,000-2,600/kW.
- **Gas and LNG prices.** Set the grey cost that green must beat; spikes in 2022 and 2026 narrowed the gap.
- **Cost of capital.** Capital-heavy projects; a few points of interest rate move levelised cost by 10% or more (PwC).

#### Metrics to track

| Metric | Why it matters | Where to track it |
|---|---|---|
| **Indian tender clearing prices (SECI, IOCL, BPCL/HPCL)** | World's most competitive price discovery | JMK Research; pv magazine India |
| **Projects at FID and offtake signed** | Real versus announced supply | IEA Global Hydrogen Review |
| **Electrolyser prices and shipments** | Main capex driver | IEA; BNEF |
| **EU RFNBO and e-SAF compliance prices** | Value of mandates | Argus; Platts |

## Other sections

- [Summary](https://www.materialinsights.org/energy/green_hydrogen_carriers/index.md)
- [Energy overview](https://www.materialinsights.org/energy/green_hydrogen_carriers/energy/index.md)
- [Correlation](https://www.materialinsights.org/energy/green_hydrogen_carriers/correlation/index.md)
- [Science and limits](https://www.materialinsights.org/energy/green_hydrogen_carriers/science/index.md)
- [Value chain](https://www.materialinsights.org/energy/green_hydrogen_carriers/valuechain/index.md)
- [Unit economics](https://www.materialinsights.org/energy/green_hydrogen_carriers/economics/index.md)
- [Engineering methods](https://www.materialinsights.org/energy/green_hydrogen_carriers/methods/index.md)
- [Equipment and suppliers](https://www.materialinsights.org/energy/green_hydrogen_carriers/equipment/index.md)
- [Overview](https://www.materialinsights.org/energy/green_hydrogen_carriers/overview/index.md)
- [Production route](https://www.materialinsights.org/energy/green_hydrogen_carriers/routes/index.md)
- [Production](https://www.materialinsights.org/energy/green_hydrogen_carriers/production/index.md)
- [Feedstocks](https://www.materialinsights.org/energy/green_hydrogen_carriers/feedstocks/index.md)
- [Trading](https://www.materialinsights.org/energy/green_hydrogen_carriers/trading/index.md)
- [Movement](https://www.materialinsights.org/energy/green_hydrogen_carriers/movement/index.md)
- [Regulation](https://www.materialinsights.org/energy/green_hydrogen_carriers/regulation/index.md)
- [Characteristics](https://www.materialinsights.org/energy/green_hydrogen_carriers/characteristics/index.md)
- [Emissions](https://www.materialinsights.org/energy/green_hydrogen_carriers/emissions/index.md)
- [Relationships](https://www.materialinsights.org/energy/green_hydrogen_carriers/links/index.md)