Hydrogen is a rainbow. There’s green hydrogen, the version of the fuel made by zapping water with enough electricity generated by renewables to separate a hydrogen molecule from the oxygen. There’s pink hydrogen, basically the same thing except made with electricity produced from nuclear reactors, a distinction that only committed anti-nuclear activists would really care to draw. Then there’s gray hydrogen, the most common version of the fuel that comes from separating out the hydrogen from methane, better known as natural gas, in a process that produces plenty of planet-heating emissions.

Given that the gray stuff makes the vast majority of the world’s supply, blue hydrogen — the type of H2 made the traditional way except with carbon capture equipment to keep the emissions from entering the atmosphere — could represent one of the more promising alternative methods for making the fuel. That seemed particularly true as the Trump administration cuts back on funding for green hydrogen experiments.

But in my latest piece for Canary Media, I explain how blue hydrogen is facing many of the same problems as the green hydrogen industry. The story revolves around Exxon Mobil’s cancellation of what would have been one of the world’s largest hydrogen production facilities in Baytown, Texas.

“Exxon’s decision reflects a broader reality: Large-scale hydrogen projects depend on long-term market signals, stable policy environments, and customers ready to commit,” said Roxana Bekemohammadi, the founder and executive director of the United States Hydrogen Alliance, an industry group. ​“These dynamics take time to mature.”

But it’s not just the Energy Department’s decision to shutter its Industrial Demonstrations Program, which had given Exxon Mobil the grant, and the cuts to the 45V federal tax credits, which support low-carbon hydrogen production, that have put the industry on shaky ground.

Trump administration moves have also undermined demand for low-carbon hydrogen. In October, the U.S. government thwarted an effort at the United Nations’ International Maritime Organization to put a price on carbon emissions from the shipping sector, pressuring foreign delegates to back off a proposal that would have expanded the market for low-carbon hydrogen.

Then there were some problems for blue hydrogen specifically:

Late last month, the European Parliament passed legislation outlining rules for low-carbon hydrogen that require producers to demonstrate not only that carbon capture equipment catches at least 70% of emissions but also ​“pretty rigorous accounting of upstream methane leakage,” according to Pete Budden of the Natural Resources Defense Council. A study published last year in the International Journal of Hydrogen Energy found that carbon-capture equipment could reduce emissions by 60%, below the threshold set in the European Union law.

“Based on the work we’ve done tracking emissions from blue hydrogen, it’s going to be really tough for U.S. hydrogen producers to meet that reduction with fossil fuels and [carbon capture and storage],” said Budden, the lead hydrogen advocate at the Natural Resources Defense Council. ​“It’s a really ambitious emissions reduction because you need a really, really high capture rate, and you need to minimize all your upstream leakage.”

Here’s yet another data point: British oil giant BP announced today it was pulling out of a blue hydrogen project in England.

I’m particularly pleased with the kicker on this Canary Media story, so be sure to check out the whole thing. You can read the full story here.