New Delhi: Global low-emissions hydrogen production could increase fivefold by 2030, driven by a wave of new projects that have reached final investment decisions in the last 12 months, according to the International Energy Agency (IEA) Global Hydrogen Review 2024. The report highlights that electrolyser capacity with final investment decisions now totals 20 gigawatts (GW) worldwide, with China accounting for over 40% of new capacity.
The report points out that if all announced hydrogen projects come to fruition, total global production could hit 50 million tonnes per year by the end of the decade. However, to achieve this, the sector would need to grow at a compound annual rate of over 90% until 2030, surpassing the pace seen in the solar photovoltaic (PV) sector during its rapid growth period.
While project announcements continue to grow, installed electrolyser capacity and low-emissions hydrogen production remain limited, as developers face regulatory uncertainties and cost pressures. “The growth in new projects suggests strong investor interest in developing low-emissions hydrogen production, which could play a critical role in reducing emissions from industrial sectors such as steel, refining, and chemicals,” said IEA Executive Director Fatih Birol.
However, the report stresses that for these projects to succeed, hydrogen producers need buyers. “Policymakers and developers must look carefully at the tools for supporting demand creation while also reducing costs and ensuring clear regulations are in place that will support further investment in the sector,” Birol added.
A key finding in the report is the significant gap between production and demand targets. While governments aim for 43 million tonnes of hydrogen production by 2030, demand targets are only at 11 million tonnes, highlighting the need for policies to stimulate demand.
The IEA also pointed out that while Latin America is emerging as a potential hub for low-emissions hydrogen production, immediate opportunities in the region lie in refining and ammonia production for domestic use, with export strategies developing over the longer term.
