The low-emissions hydrogen industry is still expected to grow significantly through 2030, even as developers face project cancellations, delays, higher costs, uncertain demand, and regulatory challenges.



According to the International Energy Agency’s 2025 Global Hydrogen Review, worldwide hydrogen demand reached nearly 100 million tonnes in 2024, approximately 2% higher than the previous year. However, most hydrogen is still produced using fossil fuels without capturing the associated emissions. Refining and industrial operations continue to account for much of global hydrogen consumption. (IEA)

Low-Emissions Hydrogen Is Growing — But More Slowly Than Expected

The pipeline of proposed low-emissions hydrogen projects has decreased considerably. Previously announced projects suggested global production could reach approximately 49 million tonnes per year by 2030. The IEA has now lowered that potential to about 37 million tonnes per year.

Even that number does not mean every proposed project will ultimately be built.

Projects that are already operating, under construction, or have reached a final investment decision are expected to provide more than 4 million tonnes of low-emissions hydrogen annually by 2030 — more than five times 2024 levels. Another 6 million tonnes per year could potentially come online if policies are implemented that create sufficient demand. (IEA)

Cost Remains One of the Biggest Challenges

Traditional hydrogen produced from fossil fuels remains significantly cheaper than low-emissions alternatives. Lower natural gas prices, inflation, and higher electrolyser costs have recently made that gap even larger.

The IEA expects the difference to begin narrowing toward 2030 as technology improves, renewable energy expands, and new regulations and incentives take effect. However, the industry still faces several obstacles, including:

• High production costs
• Uncertain customer demand
• Regulatory uncertainty
• Slow infrastructure development
• Delays and cancellations of planned projects

China Is Leading Electrolyser Deployment

China currently represents about 65% of global electrolyser capacity that is either installed or has reached a final investment decision. It also accounts for nearly 60% of global electrolyser manufacturing capacity.

However, manufacturing capacity is currently much higher than demand, which could create additional challenges for producers. The IEA also found that Chinese-made electrolysers do not necessarily provide a major cost advantage when installed outside China once transportation, tariffs, and other expenses are included. (IEA)

New Opportunities Are Emerging

Hydrogen-based fuels could also play a larger role in industries such as shipping. Wider adoption would require additional infrastructure and compatible technology, but existing port infrastructure could provide a starting point. Nearly 80 ports worldwide already have significant experience handling chemical products, which could make them better positioned to handle hydrogen-derived fuels.

Southeast Asia is another potential growth market. Announced projects could increase low-emissions hydrogen production in the region from roughly 3,000 tonnes per year today to 430,000 tonnes annually by 2030. Many of those projects, however, are still in early development. (IEA)

The Bigger Picture

The outlook for low-emissions hydrogen has become more realistic compared with the surge of ambitious project announcements earlier in the decade. The industry is facing economic and policy hurdles, but projects that have already moved beyond the announcement stage suggest meaningful growth is still underway.

Continued expansion will depend heavily on reducing production costs, creating reliable demand, developing infrastructure, and maintaining supportive policies.

Source: International Energy Agency — Low-emissions hydrogen projects are set to grow strongly