BP suspends blue hydrogen project at Whiting, Midwest future uncertain

BP indefinitely halts its blue hydrogen project at the Whiting refinery in Indiana, raising questions about the future of federal funding and the impact on regional plans for a decarbonized hydrogen sector in the United States.

Share:

British multinational BP has announced the indefinite suspension of its blue hydrogen project development at the Whiting refinery in Indiana. This decision comes as the project was a central component of a regional initiative aimed at establishing a clean hydrogen hub intended to supply heavy industry in the Midwest. Initially planned to produce hydrogen from natural gas while capturing and storing carbon dioxide (CO₂) emissions, the project aimed notably at providing low-carbon energy to regional steel mills. This initiative was part of an ambitious public-private partnership named the Midwest Alliance for Clean Hydrogen (MACH).

Federal funding under scrutiny

The Whiting project partly benefited from a $1 billion federal funding agreement between the U.S. Department of Energy (DOE) and MACH. To date, only $22 million has actually been disbursed by the U.S. government. The future of the funding, granted under the previous administration, remains uncertain, especially since the DOE has already canceled several energy projects totaling $3.7 billion. U.S. Secretary of Energy Chris Wright indicated that funding commitments made by the previous administration remain under review through the end of the summer, without specifying the fate specifically of the Whiting project.

Successive industrial withdrawals

Furthermore, this suspension is part of a series of recent pullbacks affecting the industrial development of decarbonized hydrogen in the Midwest. Steelmaker Cleveland-Cliffs, another key player in the envisioned regional hub, recently canceled its plan to build a hydrogen-powered steel plant in Ohio. This project, despite benefiting from a federal funding commitment of $500 million, was dropped. These withdrawals raise questions about the immediate economic feasibility of the planned hydrogen infrastructure, previously considered essential to the U.S. government’s strategic objective of decarbonizing heavy industry.

Complex industrial context

A BP spokesperson stated that the decision primarily aims to ensure the economic competitiveness of its refinery, one of the largest refining facilities in the Midwest. The global context marked by increased volatility in natural gas prices and high-cost carbon capture technologies complicates initial investment plans in blue hydrogen. Indeed, the emerging market for low-carbon hydrogen struggles to find financial equilibrium, compelling companies to reassess their commitments in response to current economic realities.

The impact of this suspension extends beyond BP and Whiting, prompting decision-makers and investors to reconsider the conditions necessary for the emergence of a hydrogen economy in the American Midwest. The coming months will be crucial in determining whether this withdrawal signifies a temporary strategic repositioning or a precursor to further industrial pullbacks in the region.

Global hydrogen development, supported by more than 1,500 ongoing projects and significant investments, is driving strong demand for insurance coverage, with potential estimated at over USD3bn in annual premiums by 2030.
ArcelorMittal Brazil begins a collaboration with Utility Global to develop a clean hydrogen project using the patented H2Gen system, aimed at producing up to 3 tons per day at the Juiz de Fora plant.
ENERTRAG announces the acquisition of a plot in Prenzlau to install a 130 megawatt green hydrogen production unit, with a planned investment of €300 mn, thereby supporting the regional economy and local industrial sector.
H2APEX Group SCA has completed a EUR30mn ($32.5mn) capital increase to finance the acquisition of HH2E Werk Lubmin GmbH and support the development of its hydrogen project in Germany. —
Next Hydrogen launches the largest onsite clean hydrogen production and distribution station in Ontario, capable of supplying up to 650 kg per day for powering fuel cell forklifts.
A 5,500-horsepower harbour vessel was bunkered with green ammonia at the Dalian terminal, marking the creation of a full value chain for this fuel and a technical milestone for the maritime sector.
Air Liquide begins construction of the ELYgator electrolyser in Rotterdam, a 200 MW project, supported by the Dutch government and an investment exceeding €500 mn.
A pilot project in Germany aims to produce green hydrogen at sea directly from untreated seawater on offshore wind farms, using marine bacteria and robust materials.
BP withdraws from the Australian Renewable Energy Hub, a major renewable hydrogen and ammonia project in the Pilbara region, marking a new stage for energy investments in Australia.
Next Hydrogen raises CAD1.5mn from its management and a commercial lender to strengthen its cash flow and retain teams, while maintaining its review of financial and strategic solutions.
The first European citizen funding campaign dedicated to green hydrogen enabled Lhyfe to collect €2.5mn from nearly 1,200 investors, strengthening the development of new sites in France and Germany.
In the face of renewable energy intermittency, Power-to-Hydrogen-to-Power (PtP) technology could revolutionize energy storage. However, its adoption still depends on cost reduction and efficiency improvements.
South Korean company YPP and Kazakh Invest have signed a framework agreement for the development of a green hydrogen production project in Kazakhstan, with investments potentially reaching $3.1 billion.
The Dutch government has granted major funding to HyCC for its H2eron electrolysis project, aimed at producing renewable hydrogen in the Delfzijl industrial zone.
ACWA Power has signed several agreements with European partners to develop a green energy export chain between Saudi Arabia and Europe, as part of the India-Middle East-Europe Economic Corridor project.
Manufacturer Stellantis halts production of its hydrogen-powered commercial vehicles, citing a lack of commercial prospects and an insufficient market, according to a statement released by the automotive group.
Malaysia reaches a decisive milestone in its energy roadmap with the launch of a hybrid floating hydro-solar project and the first large-scale green hydrogen hub in the state of Terengganu.
Hynamics UK and Hy24 have signed an exclusive agreement to develop the Fawley Green Hydrogen project, backed by the UK HAR2 scheme, to supply green hydrogen to ExxonMobil's petrochemical complex.
China has approved the construction of a strategic pipeline to transport green hydrogen from Inner Mongolia to Beijing, facilitating supply to industrial zones around the capital and boosting a rapidly expanding energy economy.
The European Commission introduces a greenhouse gas emissions methodology for low-carbon hydrogen, establishing a long-awaited regulatory framework for the sector and paving the way for new industrial investments.