The International Energy Agency (IEA) has reported that despite a recent slowdown caused by project delays and cancellations, low-emissions hydrogen production is still expected to experience strong growth through 2030, though at a slower pace than earlier forecasts suggested. The findings come from the IEA’s 2025 edition of the Global Hydrogen Review, which monitors worldwide hydrogen sector developments, including emerging technologies for low-emissions hydrogen.
According to the report, global hydrogen demand reached nearly 100 million tonnes in 2024, a 2% increase over 2023, in line with overall energy demand growth. Most of this demand was supplied by hydrogen produced from fossil fuels without carbon capture measures. The main consumers continue to be traditional users such as oil refining and heavy industry. Producing hydrogen from fossil fuels remains far cheaper globally, a situation worsened by falling natural gas prices and rising electrolyser costs caused by inflation and slower deployment. However, the IEA expects this cost gap to narrow by 2030 as technology prices decline, renewable energy grows, and new regulations take effect in certain regions.
Low-emissions hydrogen adoption has not yet met targets set by industry and governments in recent years. Challenges such as high costs, uncertain demand, regulatory hurdles, and slow infrastructure development have limited progress. Projects have been especially vulnerable to these headwinds. The IEA’s updated analysis shows that potential low-emissions hydrogen production by 2030 has dropped to 37 million tonnes per year, down from 49 million tonnes based on project announcements a year earlier. Because many announced projects may never be completed, actual production capacity could be much lower.
Even so, production that is operational, under construction, or has reached a final investment decision by 2030 is projected to increase more than fivefold compared to 2024, exceeding 4 million tonnes annually. An additional 6 million tonnes could become operational by 2030 if supportive policies boost demand. Fatih Birol, Executive Director of the IEA, noted that while hydrogen investment surged earlier this decade due to its potential to support national energy goals, growth is now under pressure from economic and policy uncertainties. Nevertheless, he emphasized that hydrogen technology development remains globally active. He urged policymakers to continue support programs, stimulate demand, and accelerate infrastructure development to maintain momentum.
China currently leads global deployment of electrolysers for low-emissions hydrogen, representing 65% of installed or committed capacity and nearly 60% of manufacturing capacity worldwide. However, Chinese manufacturers may face future challenges since their capacity of over 20 gigawatts per year far exceeds current demand. The report also highlights that installing Chinese electrolysers outside China offers little cost advantage once transportation and tariffs are factored in. The IEA review examines opportunities for using hydrogen-based fuels in shipping, emphasizing the need for improved technologies and better-equipped ports. Nearly 80 ports already have strong expertise in handling chemicals, suggesting readiness to manage hydrogen fuels, especially where existing bunkering infrastructure is near hydrogen production sites.
Southeast Asia receives special attention in this year’s report as an emerging hydrogen market. Announced projects indicate that the region’s low-emissions hydrogen production could reach 430,000 tonnes annually by 2030, a dramatic rise from 3,000 tonnes today. To realize this potential, the IEA recommends faster renewable deployment, targeted policy support, and more pilot projects to build expertise. The Global Hydrogen Review 2025 is accompanied by an updated Hydrogen Production and Infrastructure Projects Database and a new online tracker. This tool enables users to explore project announcements, production costs by region and technology, infrastructure developments, and over 1,000 hydrogen-related policy measures announced or implemented worldwide since 2020.
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