Bankruptcies and Project Cancellations: As They Accelerate, What Can We Learn?

Key Points

We are seeing as many project cancellations and business failures in the hydrogen and e-fuels spaces today as we are seeing successes, and we suspect that this trend will continue through 2025. More failures = less funding.
The cancellations are coming at the point of FID, where the numbers cannot be made to work, the failures are projects that made it through FID (somehow) but now find cost overruns or offtake challenges vs expectations.
The financial markets have lost faith/interest, and risk premia are high, such that a project or business that may be only a few percent shy of cash available for a step up in costs cannot find the incremental cash and any cost.
Companies that have set up different projects as different entities have the ability to declare the entity bankrupt so that they can deal with unpaid bills and equipment cancellations without impacting the parent (e.g., HH2E).
Otherwise, we only find one project this week, and it is another that may not make the cut as it depends on high priced offtake close to the power source. On power, we note Exxon’s entrance despite what Billy Bob said.

Exhibit 1: It could be worse; you could be an uncompetitive EV maker – little solace for hydrogen.