Global Low Emissions Hydrogen Production Expected to Surge by 2030 Despite Recent Challenges

The International Energy Agency (IEA) forecasts a significant expansion in global low emissions hydrogen production, projecting a rise to 37 million tonnes per year by 2030, albeit a downward adjustment from earlier estimates. Despite recent project cancellations and ongoing economic challenges, the overall demand for hydrogen reached nearly 100 million tonnes in 2024, marking a modest increase of 2% from the previous year. Most of this hydrogen continues to be derived from fossil fuels lacking carbon capture technology, which remains a cheaper option largely due to falling natural gas prices and rising costs of electrolysis technology.

However, the IEA is optimistic that the cost gap between fossil fuel-based hydrogen and low emissions alternatives will narrow by 2030, driven by advancements in technology, a surge in renewable energy deployment, and supportive regulations. While the production of low emissions hydrogen could potentially increase fivefold from current levels to over 4 million tonnes annually, this will depend on effective policies that stimulate demand and facilitate infrastructure development.

China is at the forefront of this transition, accounting for a substantial 65% of global electrolyser capacity and nearly 60% of manufacturing. Southeast Asia is identified as a growing market, with projections suggesting it could produce 430,000 tonnes of low emissions hydrogen annually by 2030, up from just 3,000 tonnes today. However, the IEA’s report underscores that the uptake of low emissions hydrogen has not met industry and government targets in recent years, primarily due to high production costs, weak demand, regulatory uncertainties, and slow infrastructure advancements.

Despite these challenges, the IEA's executive director, Fatih Birol, points to encouraging signs of ongoing development in hydrogen technologies worldwide. He urges policymakers to sustain support for hydrogen initiatives, thereby creating a conducive environment for growth. The potential for hydrogen extends beyond being merely a fuel alternative; it is increasingly viewed as a cornerstone for achieving energy security, industrial transformation, and climate action.

As the global hydrogen sector continues to evolve, strategic hubs like Rotterdam and Singapore are being positioned as key centers for hydrogen distribution and fuel bunkering. Nonetheless, significant barriers remain, including financing constraints and underdeveloped infrastructure. The IEA emphasizes the necessity of tailored policy frameworks and international collaborations to unlock the full potential of hydrogen, making it a pivotal solution for decarbonization, economic growth, and global cooperation.