The Bank of England has warned that the rapid rise in artificial intelligence focused technology stocks has created clear financial stability risks and could lead to a sharp correction in global markets.

AI Valuations Reach Their Most Stretched Levels In Years

The Bank’s latest Financial Stability Report says equity valuations linked to AI are now “particularly stretched”, with US technology firms approaching levels last seen before the dotcom bubble and UK valuations close to their most elevated point since the 2008 financial crisis. The Financial Policy Committee points out that a relatively small number of AI oriented firms have driven much of this year’s market gains, which means any reversal could have outsize effects.

Shares in companies such as Nvidia illustrate the scale of the enthusiasm. For example, it has become one of the world’s most valuable firms (a $5 trillion valuation!) as demand for its AI chips has surged, lifting its share price by more than 30 per cent this year alone following a period of even steeper growth through 2023 and 2024. The Bank notes that this rapid rise reflects real earnings strength, although it also concentrates a significant amount of market value in a handful of firms.

Not Quite Like The 90s

Andrew Bailey, the Bank’s governor, has stressed that today’s large AI firms aren’t comparable to the loss making companies of the late 1990s because they produce strong cash flows and clear commercial demand exists for their products. Bailey added, however, that this does not guarantee stability, especially as competition intensifies. His view is that AI could well become a general purpose technology capable of raising productivity, although valuations can still run far ahead of fundamentals.

A Five Trillion Dollar Infrastructure Spend

One of the most significant risks highlighted in the report is the scale and structure of investment required to support AI development. Industry estimates shared in the document suggest AI infrastructure spending over the next five years could exceed an eye-watering $5 trillion!

The Bank says that while the largest technology firms will fund much of this through their operating cash flows, around half of the total is expected to come from external financing. Debt markets, rather than equity markets, are likely to play the largest role. This includes corporate bond issuance, loans from global banks and lending from the rapidly expanding private credit sector, which exists largely outside traditional regulatory frameworks.

Growing Reliance on Borrowing

The growing reliance on borrowing matters because it creates deeper links between AI firms and the wider financial system. As the Financial Policy Committee warns, this means that if a sharp drop in valuations were to occur, losses on lending could quickly spread beyond the AI sector and place pressure on banks, credit funds and institutional investors. It also notes the increasingly interconnected nature of AI supply chains, which involve multibillion dollar partnerships across cloud providers, chip manufacturers and data centre operators.

Similar International Warnings

It should be noted here that it’s not just the Bank of England that is concerned. International organisations including the IMF and OECD have issued similar assessments this year. Both have pointed to high asset prices driven by optimism about AI related earnings and have warned of the risk of abrupt downward adjustments if expectations weaken. Senior industry figures such as JP Morgan chief executive Jamie Dimon have also expressed concern about market complacency and the possibility of a significant correction.

Why This Is Not A Simple Repeat Of The Dotcom Era

In its report, the Bank goes to some lengths to distinguish current conditions from the late 1990s bubble. Crucially, many AI firms today have established revenue streams and profitable operations and their valuations are based on substantial real world demand for cloud computing, data processing and AI model development.

Scale and Leverage Is The Real Risk Today

The risk instead actually comes from concentration, scale and leverage. For example, market value is increasingly concentrated in a small group of companies whose performance influences global stock indices, pension funds and retail investment products. At the same time, large amounts of borrowing are now tied to long term AI infrastructure projects that depend on continued investor confidence. These dynamics are different from the dotcom era yet present their own vulnerabilities.

Exposure For UK Savers And Pension Funds

The Bank has also made it clear that the UK is not insulated from an AI related correction. Many UK pension funds hold global equity portfolios where AI leaders now account for a significant share of total value. A fall in these stocks would flow through to savers’ pension pots and stocks and shares ISAs.

This has become more relevant following policy moves encouraging savers to invest more heavily in equities. The Bank’s report notes that a broad market decline could reduce household wealth, lower consumption and place additional pressure on the economy at a time when higher mortgage costs are still filtering through. Approximately 3.9 million UK mortgage holders are expected to refinance at higher rates by 2028, although a third may see payments fall as rates stabilise.

UK Banks Pass Stress Tests As Other Risks Grow

The Bank’s stress tests indicate that, thankfully, major UK lenders are resilient enough to withstand a severe downturn that includes higher unemployment, falling house prices and significant market turbulence. This resilience has led the Financial Policy Committee to propose lowering Tier 1 capital requirements from 14 per cent to 13 per cent from 2027, while still leaving banks with an estimated £60 billion buffer above minimum levels.

However, it seems that other parts of the financial system pose greater concerns. For example, the report highlights growing leverage in the UK gilt market, where international hedge funds have been borrowing heavily against their government bond holdings. The Bank warns that forced deleveraging in a downturn could amplify movements in gilt yields and push up government borrowing costs.

It also points to wider global pressures, including geopolitical tensions, cyber threats and rising sovereign debt burdens, which have created a more fragile international financial environment. These risks add further uncertainty to an already stretched market landscape shaped by the rapid growth of AI.

The Message

The key message from the Bank is really not that AI should be viewed with scepticism as a technology. For example, the report recognises that AI could deliver meaningful productivity gains and long term economic benefits. Its warning instead focuses on how the financial side of the AI boom has evolved and the vulnerabilities that could emerge if valuations adjust sharply.

UK businesses that rely on bank lending or capital markets may face more volatile financing conditions if a correction ripples across global markets. Credit channels linked to technology investment could tighten and firms with higher borrowing needs may encounter more expensive or more selective lending.

The Bank is, therefore, encouraging investors, lenders and corporate leaders to prepare for a period where AI continues to expand as a technology while financial markets remain sensitive to any signs that expectations have become overextended.

What Does This Mean For Your Business?

The central point in the Bank’s warning is really the need to separate enthusiasm for AI as a technology from the financial risks created by how the sector is currently being funded and valued. The report makes it clear that AI can still deliver major economic benefits while markets face periods of sharp adjustment, and those two realities can sit side by side. This places investors, policymakers and companies in a position where they must be ready for genuine technological progress and heightened financial volatility at the same time.

For UK businesses, the implications are already taking shape. For example, firms that depend on access to credit may find that lending conditions react quickly to any downturn in global tech markets, especially as a sizeable share of AI expansion is being financed through debt that links the sector more tightly to banks and private credit funds. Companies planning large technology upgrades or long term capital programmes may also need to consider how external shocks could affect borrowing costs or investment appetite. The same applies to institutional investors, pension schemes and retail savers whose portfolios are increasingly influenced by the performance of a small group of global AI firms.

This backdrop also gives the UK’s financial regulators a little bit of room for complacency. The resilience shown in bank stress tests is reassuring, although the vulnerabilities identified in areas such as leveraged gilt trading and private credit activity underline how market tensions could surface outside the traditional banking system. The combination of elevated geopolitical risk, cyber threats and fragile sovereign debt conditions reinforces the picture of a more complex and interconnected risk environment.

The Bank’s assessment, therefore, seems to lean heavily towards caution without dismissing the long term potential of AI. It is basically signalling that stakeholders should not assume current valuations will hold indefinitely and that preparation for a rapid repricing is now a matter of prudence rather than pessimism. UK businesses, financial institutions and savers all have a direct interest in how well those preparations are made, particularly as the effects of any correction would extend far beyond the technology sector itself.

Amazon is piloting a new ultra fast delivery service that brings household essentials and fresh groceries to customers in parts of Seattle and Philadelphia in about 30 minutes or less.

‘Amazon Now’ And What It Offers

‘Amazon Now’ is a new delivery option built directly into the main Amazon app and website. Customers in eligible neighbourhoods will see a “30 Minute Delivery” tab in the navigation bar, which opens a catalogue of items available for immediate dispatch. The pilot scheme covers thousands of products that customers often need urgently, such as milk, eggs, fresh produce, toothpaste, cosmetics, pet treats, nappies, paper products, over the counter medicines, electronics and seasonal goods. Everyday snacks like crisps and dips are included too, reflecting the impulse led nature of the service.

Ultra-Fast Delivery

Amazon describes it as “an ultra fast delivery offering of the items customers want and need most urgently”, and says its aim is to get essentials to the doorstep in about 30 minutes or less. Customers can place an order, track the driver in real time and add a tip within the app, mirroring the experience already familiar from food delivery platforms.

Where The Pilot Is Running

The rollout is currently only limited to parts of Seattle, where Amazon is headquartered, and parts of Philadelphia in the US. Amazon has not confirmed how many neighbourhoods are covered or how long the test will run, and there is no stated timetable for expansion to other US cities. The company is referring to this phase as a trial, making it clear that the results will shape future decisions.

Was Even Faster in the United Arab Emirates in October

This US pilot follows an ultra fast launch in the United Arab Emirates in October, where Amazon introduced a 15 minute delivery service using micro facilities in local communities. Some customers in the UAE reportedly received their orders in as little as six minutes, showing the company’s willingness to push the limits of rapid fulfilment.

How The 30 Minute Model Works

As you may expect, it seems that hitting a 30 minute delivery window (delivering groceries as fast as a pizza) requires a tightly controlled operation. For example, Amazon says it is using “specialised smaller facilities designed for efficient order fulfilment”, located very close to where customers in both cities live and work. These sites stock a limited but high demand range of items and are built for fast picking, packing and dispatch.

Also, delivery is handled by partners and gig workers who use the Amazon Flex system. Reports from early usage suggest that drivers must leave within a few minutes of receiving an order notification to stay within the promised window. The entire model relies on short travel distances, real time routing, and a fulfilment process that is optimised for speed rather than breadth of inventory.

No Need For Additional Downloads

Since Amazon Now is part of the main shopping app, customers do not need to download anything new or switch services. For example, once they simply enter their postcode, the app confirms eligibility and displays the 30 minute catalogue. The experience is intentionally streamlined to minimise delay between ordering and dispatch.

How Much Does It Cost?

Amazon Now is not included in Prime’s standard free delivery benefits. Instead, Prime members in the pilot areas can access 30 minute delivery from $3.99 per order. Non Prime customers pay $13.99.

A small basket fee of $1.99 applies to orders under $15, which aims to discourage very low value purchases that may be expensive to deliver at ultra fast speeds. This aligns with pricing strategies already used by food and grocery delivery platforms.

It’s An Optional Premium Service

Prime members continue to receive same day, overnight and next day delivery at no additional cost once order thresholds are met, so Amazon Now is essentially positioned as an optional premium service rather than a replacement for existing benefits.

Why Is Amazon Doing This Now?

Amazon Now is designed to fit into the company’s wider logistics expansion programme. In mid 2025, Amazon announced that it planned to invest more than 4 billion US dollars to triple the scale of its delivery network by 2026. This included growing its network of same day facilities and reorganising the entire US fulfilment system around regional hubs. The changes have already reduced average delivery times and increased the proportion of orders arriving the same or next day.

Ultra fast delivery, therefore, marks the next key stage of this strategy. Amazon’s key competitors such as DoorDash, Uber Eats and Instacart already fulfil convenience and grocery orders within an hour, often by picking from local supermarkets. Amazon’s model differs because the inventory is held in its own small facilities, giving the company much tighter control over stock levels, availability and timing.

The new pilot also builds on Amazon’s earlier experiments. For example, the company launched Prime Now in 2014, offering two hour deliveries, then closed the standalone app in 2021 when it folded the service into the main shopping app. Amazon Now is, in effect, a new iteration of that idea, but designed for a world where rapid delivery is becoming mainstream.

Impact On Competitors And The Market

The initial announcement had an immediate market impact. For example, shares in Instacart fell by more than 2 per cent and DoorDash also dipped after the news broke, reflecting investor concern that Amazon may apply the same scale and pricing power to rapid grocery delivery that it previously applied to next day fulfilment. Analysts noted that Amazon’s growing interest in this category could put pressure on existing quick commerce players whose business models often rely on high fees and narrow margins.

Walmart is also part of the competitive picture. The retailer already offers rapid grocery delivery to most US households and benefits from its extensive store network. Industry studies suggest that a large proportion of customers are prepared to pay for fast grocery deliveries, highlighting the strength of demand in this category. Amazon’s pilot will therefore be watched closely by rivals in grocery, convenience and last mile logistics.

Customers And Businesses

For customers in Seattle and Philadelphia, the immediate benefit is convenience. For example, items that once required a trip to a local shop can now be delivered in half an hour, which is faster than typical takeaway delivery times in many parts of the United States. Ultra fast delivery may appeal especially to busy households, parents, pet owners and customers dealing with last minute needs such as forgotten ingredients or essentials.

For businesses, the implications extend beyond retail. FMCG manufacturers and brand owners may now see opportunities to position products within the ultra fast catalogue or to experiment with smaller pack sizes designed specifically for rapid missions. Also, marketing strategies could evolve as Amazon gains new data on urgent purchases and browsing patterns inside the 30 minute section of the app.

Local supermarkets and smaller delivery start ups may face stronger competition if Amazon expands the model. Since Amazon controls both the inventory and the logistics, it may be able to keep prices lower than rivals that rely on third party shops and couriers.

Challenges And Criticisms

It should be noted here that this ultra fast delivery is expensive to run, and analysts have warned that these models can suffer from high operating costs. For example, faster delivery windows require more staff, more micro facilities, more inventory and more vehicles on the road. This can make profitability difficult, especially when customers expect low delivery fees.

There are labour concerns too. Gig workers may face higher pressure when delivery windows are tight, and campaigners are likely to watch how Amazon balances speed with driver wellbeing and safety. Amazon emphasises that its specialised facilities improve safety for staff picking and packing orders, but questions remain around the wider impact on drivers and delivery partners.

Sustainability is another factor to consider. For example, Amazon argues that micro facilities positioned close to customers reduce the distance and emissions associated with deliveries. However, critics point out that ultra fast services may increase the total number of delivery trips and create more packaging waste, particularly for small orders.

There is also a wider cultural debate about the need for extreme immediacy in everyday shopping. Some commentators have questioned whether orders in minutes encourage unnecessary consumption or reinforce habits built around convenience over planning.

What Does This Mean For Your Business?

The Amazon Now pilot highlights how far the rapid delivery market has evolved and why Amazon is investing heavily in this area. The company is using its scale and financial superiority, which is important because it is expensive to run, to test whether ultra fast fulfilment can become a core part of mainstream retail rather than a niche convenience service. The approach brings clear advantages for customers who value immediacy and for Amazon, which gains more control over high demand categories and more insight into urgent purchase behaviour. It also places new pressure on competitors that rely on partnerships with local supermarkets rather than owning their fulfilment process from end to end.

There are still unanswered questions about sustainability, labour practices and long term profitability. Ultra fast delivery needs dense networks of sites, reliable staffing and strong demand at a price customers are willing to pay. These pressures are not limited to the United States and will be watched closely by UK retailers, logistics firms and brands that already operate in a market where fast delivery has become an expectation. UK businesses may find themselves adapting product ranges, marketing tactics or supply chain plans if similar models expand internationally, especially in urban areas where rapid fulfilment could reshape local competition and customer expectations.

The wider impact on city infrastructure, emissions and working conditions will also remain part of the discussion. Everyone from delivery partners to sustainability groups is likely to want assurances that speed does not undermine safety or environmental commitments. The success of the model, therefore, will ultimately depend on whether Amazon can balance convenience with operational, ethical and financial realities while proving that ultra fast fulfilment can scale without intensifying existing challenges.

Cloudflare has suffered its second major service outage in less than a month, briefly taking a substantial portion of the internet offline and prompting renewed questions about the resilience of the infrastructure many organisations now rely on.

Friday 5 December Outage

This latest incident occurred on Friday 5 December, when websites around the world began returning blank pages, stalled login screens and 500 error messages from around 08:47 GMT. Cloudflare confirmed that the problem affected part of its global network and that a significant number of high profile customers were impacted. Although services were largely restored by 09:12, the disruption was extensive enough to affect millions of users and thousands of online businesses during a busy weekday morning.

What Happened And Why Did It Spread So Quickly?

Cloudflare acknowledged shortly after the incident that the outage was caused by an internal change to how its Web Application Firewall processes incoming requests. The change had been deployed as part of an emergency response to a newly disclosed security vulnerability in React Server Components. The flaw, widely discussed across the software industry, could allow remote code execution in some applications built using React and Next.js. Cloudflare introduced new rules to help shield its customers from potential exploitation while they applied their own patches.

A Bug Was Triggered

During that process, a long standing bug in how the Web Application Firewall parses request bodies was triggered under the specific conditions created by the mitigation. This resulted in errors being generated within parts of Cloudflare’s network responsible for inspecting and forwarding traffic. In practice, it meant that requests processed through those systems began failing, which is why so many sites appeared blank or unresponsive.

Not A Cyber Attack

Cloudflare’s Chief Technology Officer commented publicly that this was not the result of an attack and was instead linked to logging changes implemented to help address the React vulnerability. The company has since published a technical summary of the issue, stating that it was working on a full review to prevent similar failures from recurring.

The speed of the disruption reflected Cloudflare’s central role in global web infrastructure. For example, the company provides security, performance optimisation and traffic routing services for a large proportion of internet services. This means that when a fault is introduced in a critical part of its platform, the effects can cascade quickly across many unrelated industries and geographies.

Which Services Were Impacted?

Reports from affected organisations and users indicated that large platforms such as LinkedIn, Zoom, Canva and Discord were among the most prominent names disrupted. E commerce providers including Shopify, Deliveroo and Vinted also experienced problems. Media outlets and entertainment platforms saw outages, as did financial services and stock trading apps in some regions. Ironically, even DownDetector, the independent website that tracks service outages, was temporarily unavailable because it also runs on Cloudflare’s network.

For many businesses the disruption manifested as failed page loads, broken checkout journeys or services timing out without explanation. It should be noted that, although the outage was brief, these symptoms can have very real impacts. For example, retailers risk abandoned purchases, subscription platforms face customer frustration and organisations offering time critical services can see immediate operational strain.

How This Compares With The November Outage

The December outage arrived only weeks after Cloudflare’s previous incident on 18 November, which was far longer and affected a wider range of services. That disruption began around midday UTC and took several hours to fully resolve.

Cloudflare later explained that the November issue stemmed from an automatically generated configuration file used by its Bot Management system. A change to database permissions caused the file to grow far beyond its intended size. When the oversized file was synchronised across the network, it caused a core traffic routing module to fail repeatedly. Major services including X, ChatGPT, Spotify and large gaming platforms all experienced significant downtime.

Both The Results of Internal Changes

It seems, therefore, that the two outages were technically unrelated. The November incident was caused by a configuration file that overwhelmed a key proxying process, while the December disruption was caused by a logic error triggered within the Web Application Firewall. However, what links them is that both were the result of internal changes aimed at improving security and performance, and both exposed fragilities within a highly automated global system.

Reactions From Cloudflare And The Wider Industry

Cloudflare has stated publicly that any outage of this scale is unacceptable and has acknowledged the frustration caused to customers. After the November incident, its chief executive promised a series of improvements to configuration handling, kill switches and automated safety checks. The fact that a second issue occurred so soon afterwards has prompted visible concern from customers and industry observers about the platform’s change control processes.

The Danger Of Relying On A Small Number Of Infrastructure Providers

Security experts have emphasised the broader lesson here, i.e., that many organisations now rely heavily on a small number of global infrastructure providers. Cloudflare’s size and technical capabilities offer benefits in terms of speed and protection from attacks, yet this scale also creates single points of failure. If a major provider experiences a fault, thousands of websites and applications can be disrupted almost instantly.

Industry groups have urged organisations to reassess their resilience strategies. Some policy specialists argue that businesses should identify where they rely on a single vendor for critical operations and explore ways to diversify. This might involve adopting multiple cloud providers, splitting content delivery across different networks or architecting applications so they degrade gracefully rather than fail outright when a dependency becomes unavailable.

Customers And Competitors

For Cloudflare’s customers, the December outage reinforces the need to balance performance gains with risk planning. Many organisations use Cloudflare for security filtering, caching, bot protection and traffic routing, meaning a failure in any of those layers can have immediate consequences for availability.

Also, competitors in the content delivery and cloud security sector may see renewed interest in multi provider approaches. This does not necessarily mean businesses will move away from Cloudflare, given its extensive footprint and capability, but it is likely to encourage more organisations to build redundancy around critical services.

Regulators are also likely to take note of what has happened at Cloudflare. For example, European and UK frameworks focusing on operational resilience, such as NIS2 and DORA, place increasing emphasis on understanding and mitigating third party risk. Repeated outages at a major provider may strengthen the argument for closer oversight of critical internet infrastructure and more transparent reporting requirements.

What Happens Next?

Cloudflare has said it will publish a full post incident analysis and will continue making changes to improve reliability across its platform. The company has already committed to reviewing how new security mitigations are validated before deployment, in addition to strengthening internal safeguards that determine how changes propagate across the network.

For customers and other stakeholders, the incident is another reminder that internet resilience depends not only on defending against attackers but also on managing the risks introduced by routine operational changes. The growing complexity of web infrastructure has made this increasingly challenging, and the recent outages have placed long term operational resilience firmly back on the agenda.

What Does This Mean For Your Business?

The pace of software change, the pressure to react quickly to new vulnerabilities and the scale at which providers now operate mean that even well intentioned updates can clearly create unexpected instability. This latest incident from Cloudflare shows how a single adjustment deep inside a security layer can move rapidly through global systems and affect businesses with no direct connection to the underlying flaw. It also reinforces why resilience planning needs to be treated as a strategic priority rather than an operational afterthought.

UK businesses, in particular, face a growing need to understand how their digital supply chains actually function. Many organisations depend on Cloudflare without realising how many of their core services sit behind it. The outage demonstrated that customer experience, revenue and even internal operations can be affected within minutes if one vendor encounters a problem. These short disruptions may not make headlines for long, yet they expose gaps in continuity planning that boards and technology teams are being pushed to close, especially as regulators sharpen their expectations around third party risk.

Although Cloudflare’s competitors may now really want to highlight the benefits of multi provider architectures and the reduced exposure this can offer, the practical reality is that Cloudflare’s scale, speed and security tooling remain difficult to replicate. Most organisations may not currently be planning to abandon the platform but they may be looking for ways to introduce redundancy around it, whether by spreading workloads, adding backup routing options or designing services that fail more gracefully when a dependency falters. In other words, the market is now moving towards diversification rather than replacement.

Other stakeholders have lessons to learn from all this as well. For example, regulators will continue scrutinising outages that affect large sections of the internet, particularly where they touch financial services, transport or healthcare. Also, investors will look at whether Cloudflare can demonstrate consistent improvements after two incidents so close together. Developers and security teams across the industry may now reflect on the risks involved in rolling out urgent protections at speed, especially when the underlying software landscape is evolving as quickly as it is today.

Cloudflare remains a central pillar of global internet infrastructure, and that reality brings both advantages and pressures. Although pretty inconvenient and costly to many businesses and their users, the recent outages do not change the importance of Cloudflare, but they do highlight how essential it has become to strengthen resilience around the entire ecosystem. This means that organisations that choose to invest in understanding their dependencies and designing for failure may be better positioned to handle future shocks, whatever their source, and will place themselves on far stronger footing as digital systems continue to grow in complexity.

Users in several countries say they are seeing a rise in misleading adverts on YouTube, including fake government schemes, miracle health claims, inappropriate content and AI-generated promotions that lead to suspicious websites.

Many of the ads redirect to imitation news pages or fake portals designed to collect personal information or small payments. Viewers say the scams often look polished, making them harder to spot at a glance.

Security researchers warn that criminals are using malvertising techniques to slip fraudulent ads into YouTube’s automated auction system. Cheap AI tools make it easy to generate endless scam variations that bypass basic checks, even as billions of harmful ads are removed each year.

Businesses can reduce exposure by training staff to recognise suspicious promotions, avoiding links in untrusted ads and using browser protections that block known malicious domains. Clear reporting routes and strong account security help limit the chances of employees being caught out.

Green hydrogen was expected to become one of the most important clean fuels for decarbonising heavy industry, yet many projects across Europe, the United States and Australia are now slowing, shrinking or being cancelled altogether.

What Is Green Hydrogen?

Green hydrogen is produced by splitting water into hydrogen and oxygen using renewable electricity from wind, solar or hydropower. The process uses electrolysers, which sit between the electricity supply and the water source.

There are three main types of electrolyser, which are:

1. Proton Exchange Membrane (PEM) electrolysers (such as those built by Quest One in Hamburg), which offer fast response times and compact designs.

2. Alkaline electrolysers are a more mature technology with lower upfront costs.

3. Solid oxide electrolysers operate at high temperatures and can achieve greater efficiencies when integrated with industrial heat, although they are still emerging commercially.

Hydrogen is already widely used in fertiliser production and oil refining, but almost all of that supply is “grey” hydrogen made from natural gas without capturing emissions. The International Energy Agency says low emissions hydrogen, which includes both green and blue hydrogen, accounts for less than one per cent of today’s global hydrogen production. Scaling green hydrogen is seen as essential for heavy industries that cannot easily electrify, such as steelmaking, chemicals, shipping fuels and long duration energy storage.

Why Germany’s Expectations Have Not Yet Materialised

As a European example, Quest One’s Hamburg facility illustrates the disconnect between ambition and reality. The factory was built to support twice as many staff as it currently employs, yet orders for electrolysers remain well below capacity. Earlier this year, the company cut roughly 20 per cent of its German workforce. Its executive vice president for customer operations said the issue is not an inability to produce but a lack of demand.

Also, it seems that the price gap is a major barrier. For example, hydrogen made from renewable electricity remains significantly more expensive than hydrogen produced from fossil fuels. Companies such as Quest One estimate that costs may fall to around four euros per kilogram later this decade, which is roughly half current German prices, but only if production scales meaningfully.

Infrastructure (To Operate At Scale) Not Ready Until The 2030s

German policymakers are continuing to view hydrogen as essential for meeting climate targets. Large infrastructure is being planned, including hydrogen pipelines from the Port of Hamburg to industrial clients and new underground storage sites in salt caverns in northern Germany. It’s understood, however, that these assets will not operate at scale until the 2030s. In the meantime, companies must navigate today’s market conditions with little clarity on long term demand.

Hydrogen Better For Industry Than For Domestic Purposes

German researchers and industry advisers also highlight a second challenge, i.e., hydrogen is most valuable in heavy industrial settings with high temperature needs. It is far less efficient for heating homes or replacing petrol in passenger cars, where direct electrification performs better. However, early political debate often focused on these less suitable uses, creating public confusion and diverting attention from industrial applications that genuinely require hydrogen.

Similar Problems Across The Rest Of Europe

It seems that other European companies are encountering the same pressures. For example, ITM Power in the UK has undergone restructuring in response to losses and project delays, even as it reports growth in its order book. Its commercial progress has been held back by earlier fixed price contracts and the slow pace of customer decision making.

Also, Norway’s Statkraft, Europe’s largest renewable generator, announced earlier this year (2025) that it would stop developing new green hydrogen projects due to market uncertainty. The company said it would concentrate on a smaller set of existing projects and seek new investment partners before entering construction phases.

Norwegian electrolyser manufacturer Nel has also faced weakening order pipelines. It reports reducing planned investment, has postponed a new factory in the United States and acknowledged that customers are taking longer to commit to projects than previously anticipated.

In fact, more than 50 renewable hydrogen projects have been cancelled globally in the last eighteen months according to industry assessments, with most citing economics and unclear offtake agreements as the primary causes.

United States Developers Are Scaling Back

In the United States, the green hydrogen sector has benefited from generous tax credits through the Inflation Reduction Act, yet uncertainty remains, not least because of the Trump administration’s apparent opposition to green ideas. Plug Power, for example, one of the country’s most prominent hydrogen companies, has announced job cuts and a financial restructuring programme, pointing to tougher market conditions and slower than expected equipment sales.

Also, ExxonMobil recently paused development of what would have been one of the world’s largest blue hydrogen facilities at Baytown in Texas. Its executives said the company had not secured enough long term customers willing to pay for hydrogen at a commercially viable price.

Although interest in hydrogen production hubs continues across the US, it seems that many industrial buyers remain cautious about committing to expensive new fuels when electricity prices, carbon pricing and regulatory frameworks remain unsettled.

Australia’s Export Plans Hit Obstacles

Australia once positioned itself as a major exporter of green hydrogen and green ammonia to Asia and Europe but now several projects have been delayed or cancelled. For example, Fortescue (a large mining and green energy company) has stepped back from hydrogen developments in Queensland and Arizona and announced significant write downs. The company has said it will refocus on projects with clearer commercial pathways, including green iron and battery materials.

Also, a global commodities trading and logistics company Trafigura has halted its Port Pirie hydrogen project in South Australia after rising costs and difficulty securing guaranteed demand from industrial buyers. Analysts in the region have noted that early expectations for exporting hydrogen at large scale were likely unrealistic without stronger international commitments from importers.

Where Hydrogen Could Succeed

Energy agencies and research groups now broadly agree on the sectors where hydrogen is indispensable. Steelmaking is the most prominent example, with several companies testing direct reduction processes that use hydrogen instead of coking coal. Chemical producers are exploring lower carbon routes to ammonia and methanol. Shipping and aviation are studying hydrogen derived fuels that can integrate with existing global energy infrastructure.

These applications can offer meaningful emissions reductions and play to hydrogen’s strengths. The challenge, however, seems to be that these industries require large volumes of low cost hydrogen delivered reliably and safely. Most are not prepared to sign long term contracts until prices fall and infrastructure is in place.

Price Remains A Central Issue

Multiple European analyses estimate that green hydrogen still costs between three and five times as much as grey hydrogen produced from fossil fuels. For example, the EU’s energy regulator reported that green hydrogen in Europe was around four times the cost of fossil based hydrogen in 2024. Electrolyser prices are falling, helped in part by strong Chinese manufacturing, but electricity costs and financing remain high.

Risk Reduction Needed

Project developers say that large scale deployment will only happen once governments introduce mechanisms that reduce risk for both suppliers and buyers. Proposals include long term contracts for difference, industrial quotas that require certain sectors to buy low carbon hydrogen and funding for hydrogen hubs where production and demand can grow together.

Other Key Growth Factors

Industry leaders argue that the next phase of hydrogen’s development depends less on technology, which has largely matured, and more on policy clarity, market stability and credible industrial demand. Despite the downturn, investment continues to rise and an increasing number of projects are progressing from early design to construction.

What Does This Mean For Your Organisation?

It seems that progress now hinges on whether governments and industry commit to clear, bankable demand rather than just broad ambition. The technology is no longer the barrier, yet producers and buyers remain stuck without the conditions they need to move forward. Developers say they can’t cut prices without large scale deployment, while industrial users say they can’t commit to long term contracts until prices fall. This loop is slowing projects across Europe, the United States and Australia and is shaping whether hydrogen becomes a major industrial fuel or stays confined to small, specialist uses.

The policy environment will help decide how quickly this gap closes. Companies need predictable frameworks, stable pricing signals and clarity over infrastructure timelines before moving beyond pilots. The current pattern of cancellations and delays shows how fragile large hydrogen investments can be without these foundations.

For UK businesses, these global setbacks really matter. For example, UK electrolyser manufacturers rely on worldwide demand to scale production, reduce costs and stay competitive. Heavy industrial users in the UK, including steel, chemicals and shipping, will also track these developments closely because their own decarbonisation plans depend on affordable low carbon fuels rather than costly niche products. Slow international progress risks higher operating costs and delayed investment decisions at home.

Energy firms, investors and policymakers face similar pressures. Building pipelines, storage and import terminals requires long term confidence in the market. Financing large hydrogen hubs demands regulatory stability. Governments must balance fiscal constraints with the need to support industries that can deliver major emissions reductions. The examples emerging from Germany, Norway, the United States and Australia illustrate how easily momentum can falter without that certainty.

The wider picture here appears to be that hydrogen still offers a credible route for cutting emissions in the hardest to electrify sectors. The potential remains significant, but the path to commercial reality is proving slower and more complex than early forecasts suggested. This is the stage at which consistent policy, coordinated infrastructure planning and targeted support for genuine industrial use cases will matter most, particularly for countries like the UK aiming to compete in future low carbon markets.

Did you know you can bundle any set of contacts into a single group and send a message to everyone with just one address? It’s a huge time‑saver and eliminates the risk of forgetting a recipient.

How to create a group – Desktop (Outlook 365)

– Switch to People (the icon at the bottom of the navigation pane).
– Click New Contact Group (or New → Contact Group).
– Give the group a clear name.
– Click Add Members, choose From Outlook Contacts or From Address Book, select the people you want, then click OK.
– Click Save & Close.

How to create a group – Web (Outlook.com / Outlook on the web)

– Open People, then click New contact list (or New → Contact List).
– Name the list, click Add Members, pick contacts from your address book or type new email addresses, then hit Create.

Why it’s so handy: One click in the To field expands the whole group, keeping your message tidy and ensuring everyone gets the same info instantly. Updating a group is as easy as editing the list with no need to rewrite dozens of addresses.

Give it a try next time you need to reach a project team, club, or family list!