Despite a recent wave of project delays and cancellations, low-emissions hydrogen production is still set to see robust growth to 2030 as the nascent sector continues to develop - though at a slower pace than the burst of announcements earlier this decade had previously signalled - according to the latest IEA analysis.
The 2025 edition of the IEA's annual Global Hydrogen Review, published today, tracks developments across the hydrogen sector worldwide, with particular attention to the fast-moving developments in the emerging technologies around low-emissions hydrogen.
Worldwide hydrogen demand increased to almost 100 million tonnes in 2024, up 2% from 2023 and in line with overall energy demand growth, according to the report. The vast majority of this was met by hydrogen produced from fossil fuels without measures in place to capture associated emissions. Sectors that have traditionally used hydrogen, such as oil refining and industry, remained the biggest consumers.
Globally, it remains much cheaper to produce hydrogen from fossil fuels. The gap has widened lately due to recent declines in natural gas prices and an increase in the price of electrolysers due to inflation and slower-than-expected deployment of the technology. However, the report sees the cost gap narrowing by 2030 due to declining technology costs - and, in some regions, strong renewables growth and the enactment of new regulations.
Low-emissions hydrogen uptake is not yet meeting expectations set by industry and governments in recent years. Growth is being restrained by high costs, demand and regulatory uncertainty, and slow infrastructure development. Production projects have been particularly exposed to these headwinds. New analysis of announced projects finds that low-emissions hydrogen production by 2030 now has the potential to reach up to 37 million tonnes per year. That is down from a potential 49 million tonnes per year, based on announced projects a year earlier.
Not all projects that are announced end up coming to fruition; as a result, actual capacity is likely to be much lower. Even so, low-emissions hydrogen production is expected to see a sizable expansion by the end of the decade compared with where it stands today, according to the new report. Projects that are operational, under construction or have reached a final investment decision by 2030 are set to increase more than fivefold from 2024 levels to more than 4 million tonnes per year. An additional 6 million tonnes per year also has strong potential to become operational by 2030 if effective policies to ensure demand are implemented.
"Investor interest in hydrogen jumped at the start of this decade thanks to its potential to help countries deliver on their energy goals," said IEA Executive Director Fatih Birol. "The latest data indicates that the growth of new hydrogen technologies is under pressure due to economic headwinds and policy uncertainty, but we still see strong signs that their development is moving ahead globally. To help growth continue, policy makers should maintain support schemes, use the tools they have to foster demand, and expedite the development of necessary infrastructure."
According to the report, China is the driving force today in the deployment of electrolysers to produce low-emissions hydrogen. The country accounts for 65% of global electrolyser capacity that has been installed or reached a final investment decision, and it is home to nearly 60% of the world's electrolyser manufacturing capacity. Elsewhere, manufacturers have come under financial pressure due to rising costs and slower-than-expected uptake. Chinese manufacturers could also face challenges in the future, though, since existing manufacturing capacity of more than 20 gigawatts per year is significantly above current demand levels.
The report also includes an analysis of the cost of installing Chinese electrolysers outside China. It finds that the cost is not significantly lower than installing those made by other producers when all factors, including transport costs and tariffs, are considered.
Additionally, the report examines in detail what would be required for the shipping sector to adopt hydrogen-based fuels more widely. It finds that greater efforts would be needed to deploy compatible technologies and ensure ports are sufficiently equipped. In many cases, though, existing bunkering infrastructure used to fuel ships is proximate to low-emissions hydrogen production, revealing early opportunities. Nearly 80 ports have well-developed expertise in managing chemical products, indicating a strong readiness to also handle hydrogen-based fuels.
This year's Global Hydrogen Review includes a special focus on Southeast Asia, which is emerging as a significant and growing hydrogen market. It finds that based on announced projects, low-emissions hydrogen production in the region could reach 430 000 tonnes per year by 2030, up from just 3 000 tonnes per year today. However, many projects remain at very early stages of development - requiring faster deployment of renewables to reduce production costs, targeted policies, and an expansion of expertise-building pilot projects in order to match this potential.
The report is complemented by an updated Hydrogen Production and Infrastructure Projects Database - plus the launch of a major new online tracker. This tracker allows users to explore announced projects for low-emissions hydrogen production and infrastructure deployment, hydrogen production costs by region and technology, and the more than 1 000 hydrogen policy measures that have been announced or implemented worldwide since 2020.
