The Global Hydrogen Review 2025 by the International Energy Agency (IEA) shows steady progress across production, policy and technology as the sector moves into a new phase of development.
Published under the Clean Energy Ministerial Hydrogen Initiative, the annual report tracks global hydrogen supply and demand and developments across infrastructure, trade, investment and innovation.
Globally, hydrogen demand reached almost 100 million tonnes in 2024. This growth aligns with broader energy use, while more than 200 low-emissions hydrogen projects have now reached final investment decision globally (up from just a handful of demonstrations in 2021). Innovation across the value chain is also accelerating, with a record number of technologies moving closer to commercial readiness.
Overall, the IEA’s findings point to a sector shifting from early ambition to large-scale implementation, following a familiar pattern seen in other major clean energy sources’ transitions.
Hydrogen’s role today
Hydrogen already plays a critical role in the global energy and industrial system, particularly in refining and chemical production. In 2024, demand growth was driven mainly by these traditional uses, reflecting the essential role hydrogen plays in modern economies.
Supply today remains dominated by fossil fuels, with hydrogen production in 2024 consuming around 290 billion cubic metres of natural gas and 90 million tonnes of coal equivalent. Low-emissions hydrogen production grew by around 10 per cent last year and is expected to reach 1 million tonnes in 2025.
While this still represents a small share of total production, the IEA notes that early growth phases for new energy technologies are typically gradual before accelerating as markets, supply chains and infrastructure develop.
Importantly, the report highlights that the most immediate and scalable opportunity for emissions reductions lies in decarbonising existing hydrogen uses – particularly in refining, ammonia and chemicals – while new applications such as shipping, steel and power generation continue to develop.
Global project pipeline
One of the most encouraging trends identified in this year’s review is the growing maturity of the global project pipeline.
Although some early-stage projects have been delayed or refined as developers reassess timing and market conditions, the number of projects reaching final investment decision continues to rise. Since 2020, more than 200 low-emissions hydrogen production projects have now passed this key milestone, signalling increasing confidence among investors and policymakers.
Based on projects that are already operational, the IEA expects low-emissions hydrogen production to reach 4.2 million tonnes per year by 2030. This equates to around five times today’s level. This would lift low-emissions hydrogen’s share of global production from under 1 per cent today to around 4 per cent by the end of the decade.
In addition, a new assessment in this year’s Review finds that a further 6 million tonnes per year of announced projects could realistically be operating by 2030, provided that supportive policies continue to be implemented and demand creation measures gain traction.
The IEA notes that this type of stepwise progress — combining steady investment decisions with ongoing project refinement — mirrors the early growth trajectories seen in other clean energy technologies such as solar PV and battery storage.
Costs are improving, with regional differences
The cost of producing low-emissions hydrogen remains one of the central considerations for the sector’s expansion, and the Review finds that progress continues, although at different speeds across regions.
Recent changes in energy and equipment markets includes lower natural gas prices and higher input costs for electrolysers. This has influenced near-term project economics. However, the IEA expects the cost gap between low-emissions hydrogen and conventional production to narrow toward 2030, supported by technology learning, scale effects and policy frameworks.
In China, renewable hydrogen could become cost-competitive by the end of the decade thanks to low equipment costs and favourable financing conditions. In Europe, higher carbon prices and strong renewable resources are expected to continue improving competitiveness. In regions with lower natural gas prices, such as the United States and the Middle East, hydrogen produced with carbon capture is expected to play an important role in the near term.
These regional variations underline the importance of diverse technology pathways and market-specific strategies as the global hydrogen industry develops.
Electrolyser manufacturing scales up
Electrolyser deployment and manufacturing capacity expanded significantly again in 2024. Global installed water electrolysis capacity reached 2 gigawatts (GW), with more than 1 GW added in 2025 to date.
China continues to lead this expansion, accounting for around 65 per cent of installed and committed capacity and nearly 60 per cent of global manufacturing capacity. The rapid growth of manufacturing capability is helping to build a more resilient global supply chain and drive learning effects across the industry.
At the same time, the Review notes that electrolyser manufacturers outside China are navigating a challenging period as markets adjust and scale develops. Over time, the IEA expects continued innovation, international expansion and industry consolidation to strengthen the global manufacturing base and improve performance and reliability.
When total project costs like engineering, construction and local installation are considered, the difference between Chinese and non-Chinese equipment is narrower in overseas markets than headline equipment prices suggest, highlighting the importance of local project development ecosystems.
Building markets for clean hydrogen
Alongside supply, the creation of sustainable demand remains a key focus for policymakers and industry.
In 2024, new hydrogen offtake agreements totalled 1.7 million tonnes per year, with activity concentrated in refining, chemicals and shipping. While this was slightly lower than the previous year, a number of earlier agreements were finalised, enabling investment decisions on production facilities in several regions.
Policy frameworks to support demand are continuing to take shape. Europe is implementing sectoral targets under its Renewable Energy Directive, while India, Japan and Korea have launched major programs focused on priority sectors such as fertilisers, refining and power generation. The new International Maritime Organisation Net-Zero Framework is also expected to support the uptake of low-emissions fuels in shipping over time.
The IEA notes that translating these policy frameworks into clear, bankable market signals will be an important next step in supporting the next wave of investment.
Ports and shipping pose opportunities
Shipping is identified as one of the most promising early markets for hydrogen-based fuels, particularly methanol and ammonia.
As of mid-2025, more than 60 methanol-powered vessels are already in operation, with nearly 300 more on order. Ensuring that fuel supply and bunkering infrastructure develops in parallel is now a key focus.
The Review finds that around 80 ports worldwide already have strong capabilities in handling chemical fuels, positioning them well to adopt hydrogen-based alternatives. More than 30 major ports could each access at least 100,000 tonnes per year of low-emissions hydrogen supply from announced projects within 400 kilometres, creating clear focal points for early infrastructure investment.
Southeast Asia’s growing role
A special chapter in this year’s Review examines Southeast Asia, where hydrogen demand reached 4 million tonnes in 2024, led by Indonesia, Malaysia, Vietnam and Singapore.
The region’s pipeline of low-emissions hydrogen projects could reach 480,000 tonnes per year by 2030, with a strong focus on ammonia production and exports. While many projects are still at early stages, several large-scale developments like the 240 MW electrolyser project in Vietnam, highlight the region’s growing role in the global hydrogen economy.
The IEA identifies fertilisers, steel and maritime bunkering as particularly promising early applications, supported by the region’s strong industrial base and strategic shipping position.
Key recommendations for growth
The IEA concludes that the hydrogen sector is now entering a phase of practical, cumulative growth, supported by improving technologies, expanding policy frameworks and increasing investment certainty.
To build on this momentum, the agency recommends:
- Continuing targeted support for near-term projects in existing markets
- Accelerating demand creation in priority sectors
- Fast-tracking infrastructure in industrial and port hubs
- Strengthening public finance mechanisms to reduce early technology risk
- Supporting emerging economies in developing hydrogen-based value chains
For project-level data on low-emissions hydrogen production worldwide based on the Global Hydrogen Review, visit the IEA Hydrogen Tracker.