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Southeast Asia is on track to produce an estimated 480,000 tons of low emissions hydrogen per year by 2030, as reported by the International Energy Agency (IEA). This ambitious projection is based on 25 announced projects, primarily targeting electrolysis, with a significant portion aimed at export markets. The majority of this capacity is concentrated in Malaysia and Indonesia, where two notable projects stand out: a 1 GW nuclear-powered ammonia initiative in Indonesia, expected to produce 180,000 tons of hydrogen annually by 2028, and a hydropower-based project in Malaysia, targeting 150,000 tons by the same year.

However, the timelines for these projects are increasingly viewed as ambitious, and the only major project that has achieved a final investment decision is the Tra Vinh plant in Vietnam, which aims to generate 24,000 tons of renewable hydrogen for ammonia production. While large-scale projects have been proposed, the region's pipeline lacks intermediate projects in the 50-250 MW range, which are crucial for bridging the gap to gigawatt-scale initiatives.

Further complicating the landscape, an additional 22 projects have been announced with start dates beyond 2030, bringing the total proposed capacity to a staggering 5.7 million tons per year, although much of this remains in the conceptual phase and is deemed speculative. The IEA estimates that Southeast Asia has the potential to produce as much as 11 million tons of renewable hydrogen per year at a cost of less than $6 per kilogram by 2030, with Indonesia leading the way due to its abundant solar resources.

Despite this potential, financing remains a significant hurdle, as the cost of capital can inflate hydrogen production costs by 45 to 55 percent compared to more developed economies. Unlike their larger counterparts, governments in Southeast Asia have not provided substantial subsidies to catalyze the growth of these projects. Furthermore, while hydrogen produced from natural gas with carbon capture technology may be cheaper, it risks increasing dependency on gas imports, as ASEAN transitions from being a net exporter to a net importer.

The IEA highlights that state-owned enterprises could be instrumental in fostering the development of low emissions hydrogen, particularly for applications in fertilizer production and refining. In 2024, Southeast Asia consumed approximately 4 million tons of hydrogen, with nearly half used for ammonia production, predominantly in Indonesia, and a significant portion for refining activities, mainly in Singapore.

Looking ahead, the emerging use cases for low emissions hydrogen, such as methanol and ammonia bunkering—especially in Singapore—offer a glimpse into the future. Singapore has already initiated tenders for ammonia-powered pilots and is planning to incorporate hydrogen into its power sector, signaling a progressive shift in the region's energy landscape.