The U.S. presidential election has concluded with Trump confirmed to return to the White House for a second term. While Trump has previously vowed to halt offshore wind projects and threatened to repeal the Inflation Reduction Act, which introduces uncertainty for the renewable energy sector, including green hydrogen, his presidency will not stop the momentum of clean energy. The long-term investment prospects for U.S. green hydrogen stocks and ETFs remain unchanged.

Trump’s pro-oil and gas stance does not necessarily spell disaster for green hydrogen initiatives. Many petrochemical companies, including major oil firms like ExxonMobil (XOM) and Chevron (CVX), are supportive of hydrogen energy development. These companies are exploring hydrogen technologies, partly motivated by tax incentives.

Moreover, Trump’s policies are focused on promoting business and economic progress rather than opposing new energy and hydrogen development. Provided technological and commercial viability is demonstrated, these projects could still receive policy support. Although the hydrogen subsidies under the Inflation Reduction Act face uncertainty, the Department of Energy’s subsidies may continue post-election.

From an investment timing perspective, U.S. green hydrogen stocks have seen significant declines this year due to market pessimism. As of November 14, both the Global X Hydrogen ETF (HYDR) and Defiance Next Gen H2 ETF (HDRO) have fallen nearly 40%, offering long-term investors a rare opportunity to buy in at lower levels.

Currently, the U.S. hydrogen market is in the demonstration phase, primarily focusing on fuel cell vehicles and “grey” hydrogen, produced from fossil fuels like natural gas and coal. In contrast, green hydrogen, made from renewable energy, is poised to become transformative in heavy industry and transportation sectors.

One of the biggest challenges to green hydrogen development is cost. While U.S. natural gas is cheap, producing hydrogen from it is expensive and struggles to compete at a commercial scale. According to Whit Irvin Jr., CEO of Q Hydrogen, high production costs without subsidies make hydrogen projects economically challenging. Nonetheless, near-commercial innovative technologies are emerging.

Selected U.S. Green Hydrogen Stocks

• FuelCell Energy Inc. (FCEL): Playing a crucial role in the South Korean green hydrogen market, its fuel cell technology generates over 100 MW of sustainable power annually in the country.
• Bloom Energy Corp. (BE): Seen as a blue-chip in green hydrogen, its fuel cells and electrolyzers are foundational to the sector. Recently, it inked the largest-ever fuel cell commercial procurement agreement with American Electric Power Co. Inc. (AEP).
• Plug Power Inc. (PLUG): Another blue-chip, known for hydrogen fuel cells used in electric vehicles. It reported a 285% quarter-over-quarter growth in electrolyzer sales and secured a 25 MW order from BP PLC (BP). It’s also forming a joint venture in Spain with Iberdrola SA (OTC: IBDRY).
• Ballard Power Systems Inc. (BLDP): Produces fuel cells for buses and commercial trucks, focusing on decarbonizing transportation. Ballard has initiated a restructuring plan aiming to reduce annual operating costs by over 30%.

Selected U.S. Green Hydrogen ETFs

• Global X Hydrogen ETF (HYDR): Offers industry and geographic diversification with holdings in hydrogen and related technologies, primarily from the industrial sector, featuring an expense ratio of 0.5%.
• Defiance Next Gen H2 ETF (HDRO): Tracks the BlueStar Global Hydrogen & NextGen Fuel Cell Index, with major holdings in Bloom and Plug Power, and an expense ratio of 0.3%.

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