Green Hydrogen Supply Risk: Cleveland-Cliffs Ends $500 M Project, Ørsted Cancels 2.2 GW Offshore Wind (2023 to 2026)

Industry Project Risks: From Economic Shocks to Policy Reversals

The risk profile for large-scale clean technology projects has fundamentally shifted from primarily economic headwinds between 2021 and 2024 to a severe combination of political, regulatory, and infrastructure-related failures from 2025 to today. Early cancellations were driven by macroeconomic pressures like inflation and interest rate hikes, which rendered projects financially unviable. However, recent terminations, including the government-backed Cleveland-Cliffs hydrogen steel plant, reveal a new layer of risk where direct policy reversals and upstream supply chain failures are now the primary drivers of project collapse, even for initiatives with secured federal funding.

Ørsted’s Economic Setback in 2023

The initial wave of cancellations was typified by Ørsted’s decision in October 2023 to cease development of its 2, 248 MW Ocean Wind 1 and 2 projects in New Jersey. This move was a direct consequence of market forces. The company cited soaring interest rates, supply chain inflation, and an inability to secure adequate offshore wind renewable energy credits as the reasons for the termination, resulting in a $4 billion impairment charge. This event signaled that even the most mature clean energy sectors were vulnerable to financial shocks that disrupted project economics conceived in a low-interest-rate environment.

Cleveland-Cliffs’ Infrastructure Failure in 2025

A different category of risk materialized with Cleveland-Cliffs‘ official cancellation of its $500 million hydrogen-ready DRI project in Middletown, Ohio, on June 5, 2025. Unlike Ørsted, this project was not a victim of interest rates but of an infrastructure dependency failure. Despite securing an initial $19.1 million in DOE funding in Q 3 2024, the company terminated the plan due to an insufficient and non-cost-effective supply of clean hydrogen. This cancellation serves as a critical market signal that downstream industrial decarbonization is unachievable without the concurrent, guaranteed availability of upstream clean energy supply chains.

Federal Policy Reversal in 2026

The risk environment escalated further in 2026 as direct political intervention began actively dismantling projects. In March 2026, Total Energies abandoned its U.S. offshore wind leases after the federal administration paid the company approximately $1 billion to terminate its projects. This was followed by an $885 million payout in April 2026 to two other developers to abandon their California offshore leases. These events mark a significant departure from market-driven failures, demonstrating that political risk has evolved into an acute threat capable of directly unwinding multi-billion-dollar investments, regardless of their commercial viability.

$17 B in Cancellations: Cleveland-Cliffs and Ørsted Lead Project Terminations

A review of project cancellations from 2023 through 2026 reveals a pattern of escalating financial write-downs and a significant loss of planned clean energy capacity across multiple sectors. The termination of projects in offshore wind, green steel, and carbon capture represents over $17 billion in abandoned investments and more than 15 GW of lost capacity. This trend highlights a severe disconnect between ambitious climate targets and the practical realities of project execution in a volatile economic and political climate.

• In Q 1 2026 alone, developers canceled 38 utility-scale solar, wind, and battery projects in the U.S., wiping out 8 GW of planned capacity and $13 billion in investment due to policy instability and market uncertainty.
• The offshore wind sector was hit particularly hard, with New York state canceling its solicitation for 4, 000 MW of capacity in February 2026, citing market disruptions at the federal level, compounding the earlier loss of Ørsted‘s 2.2 GW projects in 2023.
• Industrial decarbonization plans have faltered, as seen with the Cleveland-Cliffs hydrogen project and the indefinite postponement of four large-scale CO 2 pipeline networks in the U.S. Midwest as of March 2026, which faced strong public and regulatory opposition. The Arcelor Mittal Hydrogen 2026, €1.3 B German Project Canceled also reflects this trend in Europe.

Table: Major Clean Energy Project Cancellations (2023-2026)

US and Europe, Project Cancellations by Region (2021 to 2026)

Geographically, project cancellations have been heavily concentrated in the United States and, to a lesser extent, Europe, with different regional drivers causing the terminations. In the U.S., a volatile mix of economic, political, and permitting challenges has created a difficult environment, particularly for capital-intensive projects. In Europe, while policy is more stable, projects have still been canceled due to military objections and slower-than-expected policy implementation in offtake markets.

United States: A Multi-Front Challenge

The U.S. has become the epicenter of large-scale project cancellations. The East Coast offshore wind sector has been decimated by a combination of macroeconomic factors and, more recently, direct federal opposition. The Midwest has seen the collapse of major industrial decarbonization efforts like the Cleveland-Cliffs plant and carbon capture pipelines, which have stalled due to public opposition and regulatory hurdles. A 2026 survey found federal permitting issues contributed to delays or cancellations for 94% of U.S. clean energy developers.

Europe: Policy and Security Hurdles

While Europe has not experienced the same level of political reversal as the U.S., it has faced its own unique challenges. In November 2024, the Swedish government canceled 13 offshore wind projects after the nation’s Armed Forces vetoed them on national security grounds. Additionally, consultancies warned in January 2026 that major export-oriented hydrogen projects in the Middle East, targeting European and Asian markets, were at risk of cancellation due to slow policy implementation and demand uncertainty in those key offtake regions. BP Hydrogen 2026, 2 GW Cancelled with Ørsted is another example of project setbacks affecting the region.

Technology Maturity: Viable Tech Undermined by External Factors

The recent wave of cancellations is not an indictment of the core technologies themselves, but rather a reflection of the immature and unstable ecosystem surrounding them. Technologies like hydrogen-ready DRI furnaces, offshore wind turbines, and carbon capture systems are commercially proven. However, their deployment at scale is being blocked by external dependencies, including the absence of upstream supply chains, unstable policy frameworks, and protracted permitting timelines that destroy project economics.

• Between 2021 and 2024, the primary concern was scaling up manufacturing and managing the costs of technologies that were moving from pilot to commercial scale. The focus was on technological and economic viability.
• From 2025 to today, the problem has shifted. The cancellation of the Cleveland-Cliffs project underscores this perfectly; the DRI technology is viable, but its dependence on a non-existent commercial-scale green hydrogen market made it impossible to proceed. This highlights a critical lesson in infrastructure interdependency.
• Similarly, the Kaskaskia Wind Project, a 500 MW facility in Illinois, was indefinitely delayed in 2026 not because of turbine technology, but because extended permitting caused it to lose its position in the grid interconnection queue, making the project financially unworkable.
• Even in carbon capture, a May 2026 review noted that materials like activated carbon and MOFs face significant limitations in stability and scalability that hinder commercial viability, showing that some technologies still face both technical and ecosystem-level hurdles. Cummins Hydrogen 2026, $4 B Topsoe Project Canceled further illustrates the challenges in the hydrogen sector.

SWOT Analysis: Green Hydrogen and Industrial Decarbonization Risks

The strategic landscape for industrial decarbonization has deteriorated significantly, with initial strengths in policy support being negated by emerging weaknesses and severe external threats. The failure of projects like the Cleveland-Cliffs plant demonstrates that a reliance on nascent supply chains and stable political environments represents a critical vulnerability. This SWOT analysis contrasts the operating environment before and after 2024 to highlight the key changes.

Table: SWOT Analysis for Green Steel and Hydrogen Projects (2021-2026)

Scenario Modelling: Cleveland-Cliffs and the Risk of Policy Contagion

The most critical factor for clean technology projects in the year ahead is the stability and durability of government policy and the pace of upstream infrastructure development. The cancellation of the Cleveland-Cliffs plant was not a one-off event but a signal of systemic risk. Investors and developers must now model for scenarios where political risk is a primary variable and the availability of inputs like clean hydrogen or grid connections cannot be assumed.

• If this happens: The federal government continues to actively rescind grants or use payouts to terminate clean energy projects, as seen with offshore wind leases in 2026. Watch this: Capital will rapidly exit U.S.-based, long-duration projects. Investment will pivot to technologies with shorter deployment cycles and less reliance on federal permits, or shift to more stable jurisdictions like those targeted by RWE Hydrogen 2026, 350 MW Edify Energy Project. These could be happening: A slowdown in Final Investment Decisions (FIDs) for industrial decarbonization and offshore wind projects in the U.S. An increase in project announcements in regions with integrated hydrogen hub policies, such as those in the EU or Middle East, as seen with Egypt Hydrogen 2026, $14 B Masdar & BP Project.
• If this happens: Permitting reform fails to accelerate, and grid interconnection queues remain backlogged, as exemplified by the Kaskaskia Wind Project’s fate. Watch this: Developers will prioritize smaller, distributed projects that can bypass lengthy federal review or be co-located with demand, such as behind-the-meter storage or industrial hydrogen production. There may be more interest in projects like the Protium Hydrogen 2026, 2.5 MW Project Amid BP’s Exit. These could be happening: A surge in corporate PPAs for off-site renewables paired with on-site storage. A strategic shift away from utility-scale projects dependent on new, long-distance transmission lines. More analysis on blending, like in the So Cal Gas Hydrogen Blending: 2026 Project Risk Analysis, may gain traction as a way to use existing infrastructure.

The questions your competitors are already asking

This report covers one angle of clean energy project cancellation risk. The questions that matter most depend on your work.

• Green steel projects still moving forward US
• US federal permitting reform for energy projects
• Hydrogen hub projects with final investment decision
• European offshore wind project permitting delays

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