Air-fueled vehicles and green hydrogen face a forced landing due to costs.

The lack of satisfactory results at COP 30 , held in Belém, which ended without consensus on a timetable for abandoning fossil fuels, reinforced the perception that the global energy transition process is undergoing a period of reassessment.

The impasse in the capital of Pará reflected the division between countries that advocate for concrete goals and those that fear economic impacts.

In the corporate sector, however, the high costs of advancing the replacement of fossil fuels are causing the suspension, in various parts of the world, of green hydrogen projects and a decline in the production of sustainable aviation fuels (SAF) – two areas where substantial investments were expected.

The International Air Transport Association (IATA), for example, announced this week a downward revision of global SAF production for 2026.

According to the organization, which brings together around 360 airlines (more than 80% of global air traffic), SAF production this year should reach 1.9 million tons, double that of 2024. But this growth is expected to slow down in 2026, with a forecast of reaching a maximum of 2.4 million tons.

“The growth in SAF production fell short of expectations, as poorly conceived mandates hampered the momentum in the still nascent SAF industry,” said Willie Walsh, IATA Director General, attributing the slowdown to a lack of public policies to fully utilize installed SAF capacities.

Aviation companies had been slowly moving towards adopting SAF – this year's production represented only 0.6% of total aviation fuel consumption and is projected to increase by only 0.8% by 2026.

The costs of replacing fossil kerosene are still prohibitive. According to IATA, they have added US$3.6 billion in expenses to the sector this year. In practical terms, SAF costs twice as much as petroleum-derived fuel. In markets with mandatory regulations, the cost is up to five times higher.

“If the goal is to increase SAF production to advance the decarbonization of aviation, then we need to learn from failure and work with the airline industry to design incentives that actually work,” Walsh warned.

In the green hydrogen sector, the discouragement is even greater. Around 60 large low-carbon hydrogen projects, including ventures by oil groups BP and ExxonMobil , have been canceled or suspended this year, amid rising costs, political uncertainty, and even a lack of buyers.

Low-carbon hydrogen — produced with renewable energy and water or with gas and carbon capture and storage — has faced difficulties in securing initial contracts with buyers, with so-called green and blue hydrogen being more expensive than the "grey" version, derived from fossil fuels without capturing their emissions.

“The last two years have been challenging for any company trying to develop clean hydrogen projects,” said Murray Douglas, head of hydrogen research at Wood Mackenzie. “The willingness to pay any kind of green premium on all low-carbon technologies has simply disappeared.”

The consultancy tracked more than 300 low-carbon hydrogen projects that have been canceled, stalled, or inactive since 2020, although Douglas stated that many were speculative or of low quality.

Retreat, abandonment and suspension

BP announced last week the suspension of planned investments in hydrogen plants in Oman and Teesside, in northeast England, after abandoning a green hydrogen plant project in Australia earlier this year.

In November, Exxon suspended construction of a hydrogen plant in Texas, which would have been one of the largest in the world. Equinor, ArcelorMittal, and Vattenfall are among the companies that have canceled or postponed hydrogen plants in the last 18 months, while Shell abandoned an early-stage project in Norway.

The delays highlight the problems in scaling up a technology that has long shown promise as a key way to reduce carbon emissions.

According to the International Energy Agency, more than 2,600 projects were announced globally by the end of 2024 – a number considered insufficient, since the agency estimates that clean hydrogen production needs to increase tenfold by 2035 to meet net-zero emissions targets and limit global warming.

“What we are seeing is a natural and expected phase of market maturation — similar to what the wind, solar, and battery industries experienced in their initial expansion phase, where approximately one in ten projects ended up going into operation,” stated Ivana Jemelkova, executive director of the Hydrogen Council, an organization supported by major industrial groups, as well as important oil and gas companies such as ExxonMobil, Aramco, Adani, and Adnoc.

According to the Hydrogen Council, more than US$110 billion has been committed to around 500 projects worldwide.

But cost remains a problem, and green hydrogen produced using even cheap renewable energy can cost about twice as much as that produced with fossil fuels without capturing emissions, mainly due to the cost of developing new infrastructure as well as distribution.