California's hydrogen ambitions lose steam as costs and funding woes mount

California’s plan to power vehicles and heavy industry with clean hydrogen is losing momentum after years of market turbulence, federal funding withdrawals and project cancellations. Hydrogen now costs about four times as much per mile as gasoline, and the state’s fueling infrastructure has slipped to 57 stations, several of which are out of service. Industry insiders say the shortage of buyers makes new plants uneconomical, prompting a shift toward supplying the electricity sector despite opposition from environmental NGOs.

Federal grant cuts, notably the cancellation of up to $2.2 billion for West Coast hydrogen hubs, have further dimmed prospects, while legal challenges and lawsuits target utility projects that aim to blend hydrogen with natural gas. The combination of high production costs, limited vehicle adoption and regulatory uncertainty leaves California’s hydrogen future uncertain.