In the face of a continuous rise in global hydrogen demand, the international pipeline for low-emissions projects has experienced a contraction.
Nonetheless, a significant expansion is anticipated by 2030, albeit at a slower rate than previously predicted. This is according to the latest analysis from the International Energy Agency (IEA) in their 2025 Global Hydrogen Review.
IEA's Annual Global Hydrogen Review
The newly published 2025 edition of the IEA’s Global Hydrogen Review offers a comprehensive look at the advancements in the hydrogen sector globally. It highlights the rapid development of emerging technologies related to low-emissions hydrogen.
According to the report, global hydrogen demand reached nearly 100 million tonnes in 2024, marking a 2% increase from 2023, consistent with overall energy demand growth. The majority of this demand was satisfied by hydrogen derived from fossil fuels, with conventional sectors like oil refining and industry being the primary consumers.
Declining Technology Costs
Despite global production costs being lower for fossil fuel-derived hydrogen, due to factors
Despite global production costs being lower for fossil fuel-derived hydrogen, due to factors such as decreased natural gas prices and increased prices of electrolysers from inflation and slow technology deployment, IEA projects the cost disparity to decrease by 2030.
This prediction is supported by anticipated declining technology costs and expected regulatory and renewable energy growth in specific regions.
Future of Low-Emissions Hydrogen Production
The report indicates that the pace at which low-emissions hydrogen adoption occurs is below industry and government forecasts, hampered by high costs, regulatory and demand uncertainties, and underdeveloped infrastructure.
Despite these challenges, new analyses suggest low-emissions hydrogen production could reach up to 37 million tonnes annually by 2030, a reduction from the prior projection of 49 million tonnes.
Final Investment Decisions by 2030
While many announced projects may not materialize, significant expansion is still expected
While many announced projects may not materialize, significant expansion is still expected by the decade's end. Projects currently in operation or under construction, or those with a finalized investment decision, are anticipated to increase more than fivefold from 2024 levels, accounting for more than 4 million tonnes yearly.
An additional 6 million tonnes per year could become operational by 2030, contingent on the implementation of effective policies.
Growth in Hydrogen Technologies
"Investor interest in hydrogen surged at this decade's start due to its potential in fulfilling energy objectives," stated IEA Executive Director Fatih Birol.
"The latest data reveals some economic and policy-related obstacles to the sector's development, yet the global trajectory remains promising. Policymakers should continue supporting policies, promote demand, and expedite necessary infrastructure development to sustain growth."
Deployment of Electrolysers
Financial pressures have impacted manufacturers worldwide due to rising costs and slower demand than expected
The report highlights China's leadership in deploying electrolysers for low-emissions hydrogen, with the nation contributing 65% of the global electrolyser capacity. Nearly 60% of the world’s manufacturing capacity for electrolysers is based in China.
However, financial pressures have impacted manufacturers worldwide due to rising costs and slower demand than expected. Chinese manufacturers face potential future challenges as their existing capacity of over 20 gigawatts per year surpasses current demand.
Hydrogen Adoption in the Shipping Sector
The report also delves into the adoption of hydrogen-based fuels within the shipping sector. It emphasizes the need for deploying compatible technologies and adequately equipping ports.
It notes that existing bunkering infrastructure near low-emissions hydrogen production sites offers early adoption opportunities. Around 80 ports possess strong chemical management expertise, signaling readiness to handle hydrogen fuels.
Emphasis on Southeast Asia
Review features a focused analysis on Southeast Asia, which is becoming a crucial hydrogen market
This year’s review features a focused analysis on Southeast Asia, which is becoming a crucial hydrogen market. Announced projects could boost low-emissions hydrogen production in the region from 3000 tonnes currently to 430,000 tonnes by 2030.
However, swift deployment of renewables, targeted policy implementation, and increased pilot projects for expertise development are needed to realize this potential.
Hydrogen Production and Infrastructure Projects Database
Complementing the report, the IEA updated its Hydrogen Production and Infrastructure Projects Database and unveiled a new online tracker.
This tool provides insights into low-emissions hydrogen projects and infrastructure initiatives, production costs by region and technology, and an overview of more than 1,000 hydrogen policy measures announced or implemented globally since 2020.
Amid a steady rise in world hydrogen demand, the pipeline for low-emissions projects has shrunk, but robust expansion to 2030 is still expected.
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 signaled – according to the latest IEA analysis.
IEA’s annual Global Hydrogen Review
The 2025 edition of the IEA’s annual Global Hydrogen Review, published now, 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.
Declining technology costs
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 electrolyzers 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 production by 2030
Low-emissions hydrogen uptake is not yet meeting the 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.
final investment decision by 2030
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 now, 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.
Growth of new hydrogen technologies
“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.”
Deployment of electrolyzers
According to the report, China is the driving force now in the deployment of electrolyzers to produce low-emissions hydrogen. The country accounts for 65% of global electrolyzer capacity that has been installed or reached a final investment decision, and it is home to nearly 60% of the world’s electrolyzer 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 electrolyzers 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.
Low-emissions hydrogen production
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.
Global Hydrogen Review
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 3000 tonnes per year now.
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.
Hydrogen Production and Infrastructure Projects Database
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 1000 hydrogen policy measures that have been announced or implemented worldwide since 2020.
