Global Hydrogen Sector Set for Strong Growth Despite Cancellations and Market Challenges
Low-emissions hydrogen production continues to accelerate worldwide as the clean energy transition gathers pace.
Despite recent cancellations and project delays, the global hydrogen industry is on track for robust growth through 2030, according to the International Energy Agency’s (IEA) Global Hydrogen Review 2025. The new report shows that while the pace of expansion has slowed compared to earlier forecasts, the overall direction of travel remains clear — low-emissions hydrogen is becoming a central pillar of global decarbonisation strategies.
Hydrogen demand reaches record highs
Global hydrogen demand rose to almost 100 million tonnes in 2024, a 2% increase from 2023, driven largely by industrial sectors such as oil refining, steel production, and chemicals. However, most of this demand is still being met by hydrogen produced from fossil fuels, underscoring the urgent need to scale up cleaner alternatives.
The IEA notes that low-emissions hydrogen, produced via electrolysis or with carbon capture, is growing steadily but remains hampered by high production costs, regulatory uncertainty, and insufficient infrastructure. Nevertheless, the sector’s long-term fundamentals are strong, with governments and investors continuing to back hydrogen as a key enabler of the global net-zero transition.
Production capacity rising fivefold by 2030
According to the report, low-emissions hydrogen production capacity could rise more than fivefold by 2030, with projects already operational, under construction, or reaching final investment decision expected to deliver over 4 million tonnes per year. With the right policy support, a further 6 million tonnes could also come online before the decade’s end.
While the overall project pipeline has contracted — from a potential 49 million tonnes last year to 37 million tonnes this year — the IEA remains confident that the sector will continue to expand strongly, if governments maintain targeted support schemes and create clear market demand.
China leads the electrolyser race
China is now the undisputed leader in low-emissions hydrogen technology, accounting for 65% of global electrolyser capacity that is either operational or has reached a final investment decision. The country also dominates electrolyser manufacturing, with 60% of global capacity, though oversupply risks loom as current production capacity of 20 GW per year far exceeds demand.
Elsewhere, hydrogen manufacturers face financial pressures from inflation and slower project rollouts, while shipping and heavy industry continue to explore hydrogen-based fuels. The IEA report highlights that nearly 80 major portsworldwide already have the expertise to handle hydrogen safely — signalling readiness for hydrogen adoption in the maritime sector.
Southeast Asia emerges as a growth hotspot
The 2025 review identifies Southeast Asia as one of the world’s fastest-emerging hydrogen markets. Announced projects could deliver up to 430,000 tonnes of low-emissions hydrogen annually by 2030, a dramatic rise from just 3,000 tonnes today. However, the IEA stresses that accelerated investment in renewables, skills development, and pilot projects will be crucial to realising this potential.
IEA calls for sustained policy support
Dr. Fatih Birol, Executive Director of the IEA, said:
“Investor interest in hydrogen surged at the start of this decade thanks to its potential to help countries meet their clean energy goals. While growth has slowed under economic pressure, strong momentum remains. Governments must stay the course — maintaining incentives, strengthening demand signals, and building the infrastructure needed for hydrogen to thrive.”
The IEA’s Global Hydrogen Review 2025 also launches a new Hydrogen Projects and Infrastructure Tracker, offering real-time insights into global capacity, investment, and policy measures.
