Clean hydrogen production is scaling rapidly with operational capacity up 70% over the past year, but binding demand growth remains well behind, according to the Hydrogen Council’s new Global Hydrogen Compass 2026 report.
The report, developed with McKinsey & Company, found that operational clean hydrogen capacity rose to 1.7 million tonnes per year (mtpa), from 1 mtpa in 2025, with 90% of that growth happening in China.
Operational capacity is now projected to more than double again to 3.8 mtpa in 2027, coming from a cohort of projects that reached final investment decision (FID) in 2023.
However, volumes with committed offtake agreements grew just 16% from 3.6 mtpa in 2025 to 4.2 mtpa, with ammonia and refining driving the lion’s share of growth.
Committed capacity – covering projects at FID, under construction or already operating – also grew a more modest 17% from 5.9 mtpa to 6.9 mtpa across 579 projects over the same period to represent $130bn, up from $110bn last year.
Those 579 sit within a total project pipeline the Council tracks at 1,948 projects, meaning roughly 30% have converted to committed status – 540 of which are under construction or operational (27.7%).
Hyundai Motor Group Vice-Chair and Hydrogen Council Co-Chair, Jaehoon Chang, said that competitive ecosystems are taking hold wherever countries pursue suitable hydrogen deployment with policy support.
Pipeline conversion
The $30bn added to committed investment over the past 12 months was partly offset by roughly $6bn in project cancellations and delays.
Average investment per committed project has grown to around $225m, while front-end engineering design (FEED) stage projects now average $1bn, pointing to a shift toward larger-scale developments.
Earlier-stage activity is also picking back up, according to the report. FEED-stage investment is up 50% versus 2025, led by Saudi Arabia’s 4GW Yanbu Green Hydrogen and Ammonia project.
If the roughly 7.5 mtpa currently sitting in FEED were converted to FID, the report said total committed supply could rise from 6.9 mtpa to as much as 15 mtpa by 2030 – though it cautioned timelines are tightening.
The report frames the gap between fast-growing operational capacity and slower committed-pipeline growth as a timing effect rather than a warning sign.
It said there is a three to four-year lag between FID and delivery, so today’s slower pipeline growth reflects investment decisions made years ago, while today’s momentum “will not show up in delivered supply until later this decade.”
China’s lead expands
China has accelerated as the largest market by committed investment, adding $11.8bn over the past year to a total of $45bn, and now holds more than half of committed green hydrogen capacity, accounting for 90% of new operational capacity over 12 months.
Europe has moved into second place, adding $7.9bn to a total of $30bn, but leads on project count. China and Europe together drove more than 80% of this year’s net investment growth.
North America holds $26bn – up just $3bn from last year – and continues to lead low-carbon deployment, with around 75% of committed low-carbon capacity.
Demand still lags
Despite the momentum in production, demand continues to drag. While the report estimates existing policies could “unlock” 11 mtpa of demand by 2030, only 4.2 mtpa has a binding offtake agreement.
Only 6 mtpa of the 11 is considered “firm”, backed by policies already enacted, like Europe’s Renewable Energy Directive (RED) III transport targets, China’s mobility and industrial ecosystems, and awarded subsidies in Japan and Korea.
The remaining 5 mtpa depends on policies announced but not yet implemented, such as the RED III industry targets. Europe holds the largest share of the competitive pool (5.7 mtpa), ahead of China’s 2 mtpa, North America’s 1.7 mtpa, Japan and Korea’s 1.1 mtpa, and India’s 0.1 mtpa.
The 4.2 mtpa of volumes covered by binding offtake remains heavily concentrated. Ammonia and refining account for 71% of it and drove nearly all recent growth. North America is currently the largest offtake centre (1.7 mtpa), ahead of Europe (1 mtpa), and China (at least 0.7 mtpa – albeit likely undercounted).
