Element Resources has received approval to build the Lancaster Clean Energy Center, a $1.85 billion green hydrogen plant in California. Once finished, this facility will be North America’s biggest green hydrogen plant. It can produce 22,000 tons of green hydrogen every year.
The project aims to meet the rising demand for clean energy. It will also help the United States shift from fossil fuels to sustainable energy sources.
Sun-Powered and Self-Sufficient: A Hydrogen First
The Lancaster Clean Energy Center stands out for its commitment to sustainability and innovation. The facility will run on 100% solar energy, using over 650 megawatts (MW) of solar power. Also, long-duration battery storage systems will support it. This setup lets the plant run 24/7 without needing grid electricity or fossil fuels. This way, hydrogen production stays clean and emission-free.
The plant will use advanced electrolyzers. These machines split water into hydrogen and oxygen with electricity. The hydrogen produced is called “green” because it comes from renewable energy sources.
Traditional methods, on the other hand, burn fossil fuels and release greenhouse gases. The facility will produce gaseous and liquid hydrogen. It will distribute them with zero-emission fuel cell trucks.
The Project’s Environmental and Community Benefits
Reducing Carbon Emissions:
One of the main goals of the Lancaster Clean Energy Center is to reduce carbon emissions. If the plant produces 22,000 tons of green hydrogen each year, it can replace diesel or natural gas in transport and industry.
This switch could cut carbon dioxide emissions by over 200,000 tons annually, helping California reach its climate goals. These goals aim to cut greenhouse gas emissions by 40% below 1990 levels by 2030.
Improving Air and Water Quality:
Using green hydrogen instead of fossil fuels also improves air quality. Hydrogen fuel produces only water vapor as a byproduct, which helps lower local air pollution and benefits public health.
The Lancaster plant will use groundwater from a nearby aquifer. It will only take 15–20% of the water that was used for farming on the same land. This change will ease the pressure on local water resources and promote sustainable development.
Supporting Local Communities
The project will create jobs during construction and operation. This includes roles for contractors, engineers, electricians, and plant workers. Local businesses that provide equipment and services will benefit too. This will help boost the regional economy.
The growth of green hydrogen plants also comes from tax incentives and state programs. One key program is California Jobs First. It promotes clean energy and boosts economic growth in the area.
The Role of Green Hydrogen in the Energy Transition
Green hydrogen is viewed as a vital solution for cutting carbon emissions in hard-to-electrify sectors. This includes heavy-duty transportation, shipping, and steelmaking.
Green hydrogen is different from fossil fuels. It doesn’t release harmful gases when used. This makes it important for countries and regions aiming to meet strict emissions targets.
Making hydrogen from renewable sources also boosts energy security. It lowers the need for imported oil and gas.
The Lancaster Clean Energy Center is part of a larger trend toward adopting green hydrogen across North America. The market for green hydrogen is growing rapidly, with projections showing that it could meet up to 22% of the world’s energy needs by 2050.
In the United States, government incentives from the Inflation Reduction Act are boosting major projects. They also speed up the shift to clean energy.
Here are three notable green hydrogen plants in the U.S.:
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SoHyCal (California): The largest operational green hydrogen plant in North America, producing up to three tons daily using solar power, supporting hydrogen refueling stations. It could fuel up to 210,000 cars or 30,000 city buses annually once fully operational by mid-2025.
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Sauk Valley (Illinois): Operated by Invenergy, this plant produces about 40 tons annually, using solar energy to supply hydrogen for industrial and power generation uses.
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St. Gabriel (Louisiana): A joint venture by Plug Power and Olin, under construction to produce 15 tons daily, aiming to reduce CO₂ emissions and create jobs. Operation can start by the end of 2025.
Hydrogen Goes Global: A Market on the Rise
The global green hydrogen market is growing fast. It is set for major expansion in the next ten years.
Estimates say the market, worth about $7.98 billion in 2024, might grow to between $25 billion and $60 billion by 2030, depending on the source. The annual growth rates could range from around 22% to almost 39% from 2025 to 2030. This growth comes from more government support, new technology, and higher demand in many industries.
Government initiatives worldwide are critical drivers. Countries like India, Japan, Germany, and the United States are pushing hard on hydrogen. They have started strong strategies and funding programs. Their goal is to boost green hydrogen production and build the needed infrastructure.
- For example, India aims to produce 5 million metric tons annually by 2030, while Japan targets 20 million tons by 2050.
These policies support global goals from the Paris Agreement. They position green hydrogen as a key way to cut emissions in hard-to-electrify areas like steelmaking, heavy transport, and chemical manufacturing.
New technology is lowering the costs of electrolyzers and renewable energy. This makes green hydrogen production cheaper and more practical. Renewable energy sources, such as solar and wind, work with electrolyzers to create clean hydrogen. This method ensures steady hydrogen production, which helps with energy storage and keeps the grid stable.
Also, infrastructure investments are growing worldwide. This includes hydrogen production plants, refueling stations, and distribution networks to meet rising demand.
From Lancaster to the World: A Blueprint for Clean Hydrogen
Looking ahead, green hydrogen could supply up to 24% of global energy needs by 2050, with the market potentially reaching $700 billion by 2040. Asia-Pacific, Europe, and parts of the Middle East and Latin America have many renewable resources. These regions are becoming leaders in green hydrogen development.
North America, especially states like California, is quickly embracing hydrogen technologies. They aim to achieve bold climate goals and build clean energy economies.
The Lancaster facility could set a new standard for large-scale green hydrogen production in North America. As more areas and companies aim for net-zero carbon goals, projects like this show how useful and efficient green hydrogen can be.
The plant’s output will help with transportation, public transit, port operations, and aviation. This will aid in decarbonizing many sectors and will inspire more investment and growth in the sector.
The Element Resources initiative represents a major step forward for green hydrogen in North America. As the largest green hydrogen plant on the continent, it will serve as a model for future projects and play a crucial role in the transition to a sustainable energy future.
The post Element Resources to Build America’s Largest $1.85B Green Hydrogen Plant in California appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
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