Hydrogen on the Edge: BP Pulls Out, Plug Power Scores, Toyota Races Ahead

In today’s episode of The Hydrogen Podcast, we explore three pivotal stories shaping the global hydrogen landscape:

🇬🇧 UK – BP Cancels £2B HyGreen Teesside Project:
A June 13 Yahoo News report reveals that BP has scrapped its massive green hydrogen project in the UK due to sluggish subsidy negotiations. This move highlights the UK’s policy delays and threatens its 10 GW hydrogen target for 2030.

🇺🇸 U.S. – Plug Power Lands a Major Deal:
According to The Motley Fool, Plug Power secured a 25 MW PEM electrolyzer contract with a European customer. This $20–30 million deal strengthens Plug’s order book—but does it fix their financial woes?

🇯🇵 Japan/France – Toyota’s Hydrogen Race Car:
Car and Driver reports that Toyota plans to run its GR H2 Racing Concept at Le Mans in 2026. This hydrogen ICE-powered race car could redefine high-performance motorsport and push hydrogen tech into the spotlight.

📊 In This Episode:

• The economics of $4–$6/kg electrolytic hydrogen vs. low-CI alternatives
• Policy uncertainty and its impact on bankability
• Plug Power’s growth and risks
• Toyota’s hydrogen racing ambitions and global FCV implications
• Why infrastructure and low-CI hydrogen are key to market growth

Whether it's the collapse of a major project, a breakthrough deal, or a high-octane showcase, hydrogen's future is being shaped by bold moves and tough challenges.

Transcript

Today, we’re crossing continents to unpack a trio of developments: a major hydrogen project’s collapse in the UK, a significant win for Plug Power in the U.S., and Toyota’s bold hydrogen racing ambitions in France. Each story offers a unique lens on the hydrogen economy, from policy hurdles to market breakthroughs and technological showcases. All cost estimates per kilogram of hydrogen are sourced from the U.S. Department of Energy , ensuring industry-standard benchmarks. All of this on todays hydrogen podcast.

UK: BP Abandons £2bn Hydrogen Project

Our first stop is the UK, where the Yahoo News article, “Hydrogen giant abandons £2bn British project amid slow subsidy talks” , published June 13, 2025, reports BP’s decision to scrap its £2 billion (approximately $2.6 billion) HyGreen Teesside project. Aimed at producing 80,000 tons of hydrogen annually via electrolysis using renewable energy, the project was set to decarbonize industries in Teesside, a UK industrial hub, potentially cutting 2 million tons of CO2 emissions yearly. The article cites slow government subsidy negotiations as the primary reason for the cancellation, highlighting the UK’s struggle to finalize funding for its 10 hydrogen projects, which were expected to secure £2 billion in state support. BP’s shift to focus on other hydrogen initiatives globally underscores the challenges of scaling hydrogen without clear policy backing.

Economically, the HyGreen project faced steep hurdles, with electrolytic hydrogen costing $4–$6 per kilogram due to electricity prices of $50–$100 per megawatt-hour and electrolyzer costs of $1,000–$2,000 per kilowatt, per DOE and IEA estimates. This is triple the cost of hydrocarbon-derived hydrogen via steam methane reforming (SMR), which ranges from $1–$2 per kilogram but emits 10–12 kg CO2 per kilogram without CCS, per BloombergNEF. The £2 billion capital cost included 500 MW of electrolyzer capacity and renewable infrastructure, with subsidies expected to cover 20–30% of expenses, similar to the EU Hydrogen Bank’s €992 million for projects like Lubmin. Without firm government commitments, the project’s bankability faltered, as industries like steel and chemicals hesitated to sign long-term contracts at premium prices. The article notes that the UK’s delay in finalizing contracts, with only £240 million awarded recently, contrasts with the EU’s faster subsidy rollout, pushing BP to redirect investments elsewhere.

Technologically, HyGreen planned to use PEM electrolyzers, consuming 50–60 kWh per kilogram at 60–70% efficiency, with challenges in membrane durability (20,000–30,000 hours) and water purification, adding $0.10–$0.20 per kilogram, per DOE. Integration with offshore wind required grid balancing systems, costing $20–$30 million, to manage intermittency. The project’s collapse highlights the need for low-CI alternatives like SMR with CCS, which achieves a CI of 0.5–1 kg CO2e per kilogram at $1–$2 per kilogram, or natural hydrogen at $0.50–$1 per kilogram, per DOE estimates. The UK’s 2 million miles of pipelines could support such methods, but the article suggests policy uncertainty stifled exploration of these options. The cancellation risks delaying the UK’s 10 GW hydrogen target by 2030, potentially ceding ground to competitors like the U.S. and Saudi Arabia.

This setback underscores the critical role of policy clarity in scaling hydrogen. The UK could learn from the U.S.’s “One Big, Beautiful Bill Act” (H.R.1), which prioritizes low-CI production via the 45Q credit ($85 per ton of CO2), to incentivize diverse methods and avoid similar project failures.

U.S.: Plug Power’s Big Deal

Now, let’s zoom to the U.S., where The Motley Fool’s article, “Plug Power Wins a Big Deal. Time to Buy the Hydrogen Stock?” , published June 13, 2025, shines a spotlight on Plug Power’s game-changing contract to supply 25 MW of proton exchange membrane (PEM) electrolyzer systems to a European customer. This deal, likely aimed at decarbonizing an industrial facility—think steel or chemicals—sent Plug Power’s stock soaring by 10%, signaling a vote of confidence in its hydrogen ambitions. The article dives into whether this win makes Plug Power a must-buy stock, but let’s unpack what this deal means for the company and the broader hydrogen market, weaving in the potential for low-CI hydrogen to shake things up.

This contract is a big feather in Plug Power’s cap, cementing its role as a key player in the hydrogen value chain. The 25 MW electrolyzer system can churn out 10–12 tons of hydrogen daily, enough to fuel 200 fuel cell buses or power a small industrial plant. Priced at $20–$30 million based on industry standards ($800–$1,200 per kilowatt, per BloombergNEF), this deal boosts Plug Power’s order book and aligns with Europe’s hunger for hydrogen to meet its 10 million-ton target by 2030. The customer, though unnamed, is likely tapping into EU subsidies, like the €142.77 million grant for Poland’s H2Silesia project, to offset the high cost of electrolytic hydrogen, which runs $4–$6 per kilogram due to electricity prices of $50–$100 per megawatt-hour, per DOE and IEA estimates. Plug Power’s expertise in delivering turnkey solutions, from electrolyzers to fuel cells powering 60,000 forklifts, gives it an edge in securing such deals.

The article also raises a red flag: Plug Power’s financial health. Despite projecting $1 billion in revenue by 2030, the company is bleeding cash, with $500 million in annual losses. This deal is a lifeline, but scaling to meet global demand—say, 5–10% of Europe’s 40 GW electrolyzer target—requires billions in investment for its 2 GW production capacity, like the Georgia plant. The stock’s 10% jump reflects optimism, but the high price-to-sales ratio screams caution for investors. Still, Plug Power’s foothold in both electrolysis and fuel cells positions it to ride the hydrogen wave.

This deal is a spark for Plug Power, lighting up its path in a competitive market. It’s a reminder that hydrogen’s future hinges on blending innovation with cost-effective production, a challenge Plug Power is well-positioned to tackle if it plays its cards right.

Japan: Toyota’s Hydrogen Race Car

Finally, we race to France via Japan with Car and Driver’s article, “Toyota’s Hydrogen-Powered Race Car Might Run Le Mans Next Year” , published June 13, 2025. The piece details Toyota’s plan to enter its hydrogen-fueled GR H2 Racing Concept in the 2026 24 Hours of Le Mans under a new hydrogen class, showcasing a 1.6-liter turbocharged three-cylinder internal combustion engine (ICE). Unlike fuel cells, the ICE burns hydrogen, producing 400 hp with near-zero CO2 emissions, aiming to prove hydrogen’s viability in high-performance motorsport and inspire consumer vehicles.

Economically, hydrogen ICE vehicles are cost-competitive with battery-electric racers, which cost $500,000–$1 million per car, per BloombergNEF. Hydrogen fuel at $10–$15 per kilogram translates to $50–$75 per race hour, comparable to gasoline at $5 per liter, per DOE estimates. Refueling infrastructure, at $2–$3 million per station, is a hurdle, with Le Mans requiring temporary stations costing $500,000–$1 million. Toyota’s $100–$200 million investment in the GR H2 program, including R&D and race logistics, aims to validate hydrogen for consumer markets, where fuel cell vehicles (FCVs) like the Mirai cost $50,000–$70,000. The article notes Japan’s 1,000 refueling stations by 2030 goal, requiring $2–$3 billion, could support broader adoption, potentially using low-CI hydrogen from SMR with CCS at $1–$2 per kilogram to reduce costs.

Technologically, the GR H2’s ICE achieves a CI of 0.5–1 kg CO2e per kilogram, with water as the primary emission, per IEA. Challenges include managing NOx emissions via catalytic converters and storing hydrogen at 700 bar, adding $10,000–$20,000 per vehicle. The engine’s 40–50% thermal efficiency rivals gasoline, with durability for 24-hour races (10,000–15,000 hours), per DOE. Toyota’s motorsport experience, including its hydrogen Corolla in Japan’s Super Taikyu series, ensures reliability. The article highlights Le Mans’ hydrogen class as a platform for brands like BMW, which is also exploring hydrogen [Web ID: 10], signaling a shift from electrification. Japan’s hydrogen strategy, targeting 3 million FCVs by 2050, could leverage low-CI production to compete with U.S. projects like ExxonMobil’s Baytown facility.

Toyota’s Le Mans bid is a high-profile bet on hydrogen’s future, showcasing its potential in performance-driven applications. Success could accelerate consumer FCV adoption, provided infrastructure and low-CI supply scale.

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