IEA sees slower but steady growth in low-emission hydrogen by 2030

Low-emission hydrogen production is expected to expand this decade despite project delays and cancellations, the International Energy Agency (IEA) said in its Global Hydrogen Review 2025.

The report noted that global hydrogen demand reached nearly 100 million tonnes in 2024, a 2 per cent rise from the previous year, broadly in line with overall energy demand growth. Most of this demand, however, continues to be met through hydrogen made from fossil fuels without emissions capture.

Oil refining and industrial sectors remain the largest consumers, as fossil-fuel-based hydrogen remains cheaper due to falling natural gas prices and higher electrolyser costs. The IEA expects this price gap to narrow by 2030 as technology costs decline.

The report highlighted that low-emission hydrogen deployment is lagging behind earlier expectations. Challenges include high production costs, uncertain demand, limited infrastructure, and slow regulatory progress. Announced projects suggest potential production of 37 million tonnes per annum (mtpa) by 2030, lower than the 49 mtpa projected last year.

Even so, output is set to increase significantly by the end of the decade. Projects already operational, under construction, or with a final investment decision (FID) could deliver more than 4 mtpa by 2030, over five times current levels. With effective demand-side policies, an additional 6 mtpa could be realised within the same period.

IEA executive director Fatih Birol said investor interest surged earlier this decade, driven by hydrogen’s role in supporting energy transition goals. He cautioned that growth is facing economic headwinds and policy uncertainty, but added that development remains on track globally. He urged governments to maintain support measures, stimulate demand, and accelerate infrastructure build-out.

China continues to dominate electrolyser deployment, accounting for 65 per cent of low-emission hydrogen capacity that is either operational or awaiting an FID.

This year’s review placed particular attention on Southeast Asia, which the IEA identified as an emerging market. Announced projects in the region could expand production from 3,000 tonnes per annum (tpa) in 2024 to 430,000 tpa by 2030. Realising this growth, however, will require faster renewable energy deployment, targeted policy support, and scaling up of pilot initiatives.