The green hydrogen industry is facing growing pains, and investors may need to adopt a longer time horizon for expectations.
This type of hydrogen is made with renewably generated electricity, used to separate water into hydrogen and oxygen with a device called an electrolyzer. Gray hydrogen, on the other hand, is the traditional way of making hydrogen from natural gas without using carbon capture.
[Sign up for stock news with our Invested newsletter.]
However it’s made, hydrogen can be stored and turned into electricity to power automobiles, ships and even aircraft. In the future, green hydrogen may play a key role in helping decarbonize sectors with emissions that are hard to abate, such as steelmaking and other heavy industry.
In the early 2020s, the U.S. government set ambitious green hydrogen targets, as decarbonization in the face of climate change was more of a priority. By 2022, global governments were targeting 190 gigawatts (GW) of electrolysis capacity by 2030, according to the International Energy Agency, or IEA.
But there has been a wave of project cancellations and delays, and targets for low-emissions hydrogen adoption have been scaled back. In a June report, the IEA said that announced electrolyzer projects totaled only 137 GW by 2030, and a mere 28 GW from those projects have reached the final investment decision phase.
Green Hydrogen’s Challenges and Investment Risk
Cost is one of the biggest hurdles for green hydrogen. Because it remains much more expensive than hydrogen made from natural gas, green hydrogen isn’t competitive at commercial scale, creating the main current hurdle the industry is trying to get over.
“The ongoing theme in the hydrogen space is proof of scale,” says Whitaker Irvin Jr., CEO at Q Hydrogen, a hydrogen energy technology company. “The industry has already made the case for hydrogen’s potential, but the conversation now is focused on whether it can be financed and offered at prices that are sustainable for both producers and consumers.”
He adds, “Economic discipline is the main factor separating the projects with long-term potential from those relying on policy support.”
Companies are working out the qualification conditions and financing timelines for a clean hydrogen production tax credit in the U.S., and Irvin thinks permitting reform is a catalyst for the industry that seems to have bipartisan support and could be finalized soon. “Its resolution would unfreeze projects that have been stalled for years,” he says.
Andrew Carman, CEO of PACC Services, a hydrogen and alternative fuels services company, agrees that scale is the main issue facing the hydrogen industry now. His company has brokered deals for low-carbon hydrogen supplied from a K2 Pure Solutions project in northern California to regional industrial fleets, ports and transit agencies.
Green Hydrogen’s Transition: Demonstration to Deployment
“On the demand side, we’re moving beyond the question of whether hydrogen works for a particular application,” Carman says. “The conversation now is increasingly about how to move from demonstrations to larger-scale commercial deployments.”
He says, “We’re seeing that transition clearly in California’s transit market, where agencies are placing increasingly large orders for fuel cell electric buses and deploying them.”
On the supply side, even though many mega-scale production projects proposed by large energy companies have been paused or canceled because of market uncertainty, that doesn’t mean hydrogen supply development has come to a standstill.
“It means the next phase may look different from what many people envisioned several years ago,” he says. “We believe the hydrogen market will develop more like a marathon than the 400-meter sprint many envisioned a few years ago.”
With that in mind, here’s a look at several top green hydrogen stocks and an exchange-traded fund, or ETF.
| Stock/ETF | Investment Case |
| L’Air Liquide SA (ticker: OTC: AIQUY) | Established gas giant offering low-risk, steady green hydrogen growth. |
| FuelCell Energy Inc. (FCEL) | Capitalizes on high natural gas prices to expand Asian green hydrogen and sustainable electricity. |
| Bloom Energy Corp. (BE) | Flexible fuel systems targeting high-demand utilities and AI data centers. |
| Plug Power Inc. (PLUG) | Leader in heavy-duty vehicle infrastructure and commercial-scale green hydrogen. |
| Ballard Power Systems Inc. (BLDP) | Powers zero-emission heavy transportation and offers end-to-end energy services. |
| Global X Hydrogen ETF (HYDR) | Provides diversified, cross-sector global exposure to the hydrogen value chain. |
L’Air Liquide SA (OTC: AIQUY)
This company is a major player in gray hydrogen, but it has been expanding in the green hydrogen space. Its long expertise in the hydrogen business and status as a well-established company, as opposed to a startup, offer investors a comparatively stable entry into green hydrogen.
The company has said it intends to triple low-carbon hydrogen sales by 2035 and expand its electrolyzer capacity to 3 GW by 2030.
FuelCell Energy Inc. (FCEL)
Although green hydrogen is a nascent market around the world, adoption has been moving faster in nations with higher natural gas prices, including China, most of Europe and South Korea. Higher natural gas prices make the traditional way of making hydrogen more expensive.
FuelCell Energy has been a key player in the green hydrogen expansion in South Korea, with its technology producing sustainable electricity across the nation.
Fuel cells essentially perform the reverse operation of electrolyzers to convert hydrogen into electricity. As a manufacturer of fuel cell energy platforms, FuelCell is right in the middle of the green hydrogen trend.
Bloom Energy Corp. (BE)
Among green hydrogen stocks, Bloom is one of the blue chips. The company makes both fuel cells and electrolyzers, so it’s involved in the twin pillars of the green hydrogen space.
Bloom’s fuel cell systems can run on hydrogen, biogas and natural gas, giving the company a larger market until green hydrogen becomes more widely adopted. The company’s technology can be used by utilities and the transportation industry, giving it an edge in two sectors that are facing pressure to decarbonize.
Data centers form part of Bloom’s customer base, and this could prove increasingly important as these centers require increasing amounts of power for energy-hungry artificial intelligence applications.
[READ: 5 Best Nuclear Energy Stocks and ETFs to Buy]
Plug Power Inc. (PLUG)
This company is another blue chip in the green hydrogen world. It makes hydrogen fuel cells for fuel cell electric vehicles, positioning it well if green hydrogen eventually becomes a serious competitor to battery-powered electric vehicles.
That’s a possibility because hydrogen-powered vehicles can cover longer distances than automobiles powered by lithium-based batteries, an advantage given that range anxiety has been a hurdle to EV adoption.
Plug power has deployed roughly 70,000 fuel cell systems and more than 250 fueling stations, which the company says is more than any other company in the world. It is developing green hydrogen production plants targeting commercial operation by the end of 2028.
Ballard Power Systems Inc. (BLDP)
Ballard makes fuel cells that can power buses, commercial trucks, trains, ships, passenger cars and forklifts, making it another play on decarbonized transportation.
Last month, the first hydrogen fuel cell-powered passenger train entered regular service in India, powered by a Ballard fuel cell. That’s the kind of green energy chops that can serve a company well as firms around the world seek to bolster their sustainability credentials.
Ballard is also scaling up. In June, the company announced it would buy GeoPura Ltd., a zero-emission hydrogen-based power solutions provider. Ballard says the deal will expand its business model to include an energy-as-a-service solution combining hydrogen production, distribution, logistics, refueling, fuel cells and stationary power generation.
Global X Hydrogen ETF (HYDR)
There aren’t that many publicly traded pure-play green hydrogen companies, and the ones that exist are relatively new, which makes the diversification offered by this green hydrogen ETF attractive.
The Global X Hydrogen ETF is diversified by jurisdiction and industry, with the fund’s literature noting that the shift to renewable energy isn’t just happening in a single sector or region. Most of its holdings are in the industrials sector, but it also has holdings in the consumer discretionary, materials, communication services and utilities sectors.
The fund includes companies involved in hydrogen production, integrating hydrogen into energy systems, and making fuel cells, electrolyzers and other technologies related to using hydrogen as an energy source.
The fund has an expense ratio of 0.5%, or $50 per year for every $10,000 invested.
More from U.S. News
10 Best Growth Stocks to Buy for 2026
7 Best Defense Stocks to Buy Now
7 Best Cybersecurity Stocks to Buy
5 Best Green Hydrogen Stocks and an ETF to Buy originally appeared on usnews.com
Update 08/20/26: This story was previously published at an earlier date and has been updated with new information.
