Hydrogen production growth remains robust to 2030

However, the expansion will be slower.

The production of low-emissions hydrogen is still set to see robust growth to 2030 as the nascent sector continues to develop, according to the latest International Energy Agency (IEA) analysis.

In its latest Global Hydrogen Review, IEA said this growth will be at a slower pace than the burst of announcements earlier this decade had previously signalled.

“Growth is being restrained by high costs, demand and regulatory uncertainty, and slow infrastructure development. Production projects have been particularly exposed to these headwinds,” IEA said.

An analysis of announced projects saw that low-emissions hydrogen production by 2030 now has the potential to reach up to 37 million tonnes per year. This was down from a potential 49 million tonnes per year based on announced projects a year earlier.

“Not all projects that are announced end up coming to fruition; as a result, actual capacity is likely to be much lower,” IEA said.

Despite this, low-emissions hydrogen production is expected to see a sizable expansion by the end of the decade compared with where it stands today. Projects that are operational, under construction or have reached a final investment decision by 2030 are set to increase more than fivefold from 2024 levels to more than 4 million tonnes per year.

IEA said an additional 6 million tonnes per year also has strong potential to become operational by 2030 if effective policies to ensure demand are implemented.

China is a major driver, with the country accounting for 65% of global electrolyser capacity that has been installed or reached a final investment decision. It is also home to nearly 60% of the world’s electrolyser manufacturing capacity.

“Chinese manufacturers could also face challenges in the future, though, since existing manufacturing capacity of more than 20 gigawatts per year is significantly above current demand levels,” IEA noted.