Despite a recent spate of project delays and cancellations, the International Energy Agency (IEA) says low-emissions hydrogen production remains on track for significant growth through 2030—though momentum has slowed from the surge of announcements seen earlier in the decade.
The findings were published Friday in the IEA’s 2025 edition of the Global Hydrogen Review, the agency’s annual analysis of developments across the sector. The report offers a detailed snapshot of how hydrogen markets are evolving, with a particular emphasis on emerging low-emissions technologies.
Demand Rises, but Supply Still Fossil-Based
Worldwide demand for hydrogen reached nearly 100 million tonnes in 2024, up 2 per cent from the previous year, broadly in line with global energy demand growth. The report notes that most of this demand continues to be met by hydrogen produced from fossil fuels without carbon capture, with oil refining and industrial sectors remaining the largest consumers.
Producing hydrogen from fossil fuels continues to be far cheaper than generating it from low-emissions methods such as electrolysis. Recent declines in natural gas prices, coupled with rising costs for electrolysers due to inflation and slower deployment, have widened the cost gap. However, the IEA projects that technological advances, strong renewable energy growth in certain regions, and supportive regulations could narrow the cost differential by 2030.
Slower Progress on Projects
The report highlights that low-emissions hydrogen uptake is falling short of expectations set by industry and government strategies. High costs, regulatory uncertainty, weak demand signals, and underdeveloped infrastructure continue to impede progress.
Announced projects now suggest global low-emissions hydrogen production could reach up to 37 million tonnes annually by 2030—down from the 49 million tonnes projected a year earlier. Actual capacity is expected to be lower still, given that not all announced projects advance to completion.
Even so, the IEA says a fivefold expansion of operational, under-construction, or fully financed projects is likely, reaching more than four million tonnes annually by 2030. A further six million tonnes could materialize if governments introduce effective demand-boosting policies.
“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.”
China Leads Electrolyser Deployment
China is emerging as the dominant player in electrolyser deployment, accounting for 65 per cent of global installed or committed capacity. The country also houses nearly 60 per cent of worldwide manufacturing capability. But with more than 20 gigawatts of annual manufacturing capacity already in place, Chinese producers may face future oversupply challenges given current demand levels.
The report also notes that once transport costs and tariffs are factored in, installing Chinese-made electrolysers abroad is not significantly cheaper than deploying those from other manufacturers.
Shipping and Ports in Focus
The IEA devotes part of its analysis to the potential for hydrogen-based fuels in the shipping industry. Wider adoption will require advances in compatible technologies and significant upgrades to port infrastructure. Yet early opportunities exist: many existing bunkering facilities are located near prospective low-emissions hydrogen production sites, and nearly 80 ports worldwide already have established expertise in handling chemical products, which could ease the transition to hydrogen fuels.
Southeast Asia Emerging
This year’s report also spotlights Southeast Asia, where hydrogen is gaining traction as a growth market. Announced projects could bring low-emissions hydrogen production to 430,000 tonnes annually by 2030, compared with just 3,000 tonnes today. Most projects remain in early development, underscoring the need for faster renewable energy deployment, targeted policy frameworks, and expanded pilot projects to develop technical expertise.
Tools for Tracking Progress
Complementing the report, the IEA has released an updated Hydrogen Production and Infrastructure Projects Database and launched a new online tracker. The tool allows users to explore announced projects, regional production costs, and more than 1,000 hydrogen-related policy measures announced or implemented worldwide since 2020.
The data, the IEA says, reinforces a central message: while the path forward is slower than once envisioned, the low-emissions hydrogen sector remains poised for significant, if uneven, growth over the remainder of the decade.
