The new year is proving to be a tough slog for the Hazer Group Ltd (ASX: HZR) share price.
The technology company that's creating low-emissions hydrogen and graphite production processes saw its stock surge 41.98% in 2021. It ended last year trading at $1.15.
Sadly, 2022 hasn't been so kind to Hazer's shares. They've tumbled 20.96% year to date.
At the time of writing, the Hazer share price is trading at 90.5 cents.
So, what's been dragging on the hydrogen-focused ASX share this year? Let's take a look.
What's going wrong for the Hazer share price?
The Hazer share price has been struggling amid a barrage of news and reports that large investors are hesitant to invest in hydrogen.
Defects in parts for the company's commercial demonstration project and sliding revenues have weighed on the stock in 2022. Meanwhile, it was boosted by the announcement of a new Canadian hydrogen production facility.
However, some of the market's big players are wary of hydrogen despite its apparent popularity.
Australian National University energy economist, Paul Burke, believes that Australia's potential to become a major green energy exporter is vast, reports the Financial Times (FT). But more funds are needed to realise the sector's potential.
Additionally, Burkes notes that the federal government "could be doing more" to support the nation's green energy potential.
The government has invested in hydrogen projects – including 'blue' hydrogen projects, which create carbon emissions.
In fact, the federal government promised hundreds of millions for hydrogen production in its latest budget.
But that probably won't be enough.
Hydrogen is one of the newest forms of low-emissions energy and it's reportedly lacking capital from super funds and investment houses.
While initiatives like an emissions trading scheme or a carbon tax could do more to force investment in low-emissions energy sources, Burke told the FT, a lack of capital could be dragging on sentiment for Australia's hydrogen sector.
And that could be weighing on the Hazer share price in 2022. Though, the company's stock isn't alone in the red.
The share prices of hydrogen-focused companies, Pure Hydrogen Corporation (ASX: PH2), Province Resources Ltd (ASX: PRL), and Sparc Technologies Ltd (ASX: SPN) have respectively slumped 23%, 35% and 51% year to date.
