The International Energy Agency (IEA) has released its 2025 Global Hydrogen Review, highlighting strong demand growth but warning that low-emissions hydrogen projects are falling behind expectations for 2030. Despite early momentum, delays, cancellations, and regulatory uncertainties are slowing progress toward climate and energy transition targets.
Hydrogen demand and supply trends
Global hydrogen demand rose to almost 100 million mt in 2024, a two percent year-on-year increase, mainly driven by oil refining and industrial sectors.
However, most hydrogen is still produced from fossil fuels without carbon capture. Fossil fuel-based hydrogen remains cheaper than low-emissions alternatives, with the cost gap widening due to falling natural gas prices and rising electrolyzer costs.
The IEA expects the cost gap to narrow by 2030 as technology prices fall, renewable power expands and new regulations come into force.
Revised outlook for low-emissions hydrogen
The IEA warns that low-emissions hydrogen output is falling behind industry and government targets:
- By 2030, production could reach up to 37 million mt per year, down from the 49 million mt projected last year.
- Currently operational, under-construction, or final investment decision-approved projects could raise production fivefold to over 4 million mt per year by 2030.
- With stronger policies, an additional 6 million mt per year could be unlocked.
Policy and investment challenges
IEA executive director Fatih Birol warned that, while investor interest surged in the early 2020s, growth is now under pressure from policy uncertainty, economic headwinds and slow infrastructure rollout.
He urged policymakers to maintain support schemes, stimulate hydrogen demand and accelerate infrastructure development
China’s dominance in electrolyzers and Southeast Asia’s potential
China remains the dominant player in electrolyzer deployment, representing 65 percent of installed or committed global capacity and nearly 60 percent of global electrolyzer manufacturing. While Chinese producers currently hold significant scale, they face potential overcapacity challenges, given existing manufacturing capacity of 20 gigawatts per year exceeds present demand.
A special focus on Southeast Asia highlights the region’s potential growth. Announced projects could raise low-emissions hydrogen production there from 3,000 mt today to 430,000 mt annually by 2030. Realizing this potential will require faster renewable deployment, targeted policy frameworks, and expertise-building through pilot projects.