IEA’s Global Hydrogen Review 2025 Highlights Steady Growth Amid Challenges in the Hydrogen Sector
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The global hydrogen sector continues to expand, but cost gaps, infrastructure barriers, and uneven deployment remain significant challenges, according to IEA’s Global Hydrogen Review 2025. While global hydrogen demand reached nearly 100 million tonnes in 2024, low-emissions hydrogen accounts for less than 1% of total supply, despite annual growth of 10%.
The report, published by the International Energy Agency (IEA) as part of its Clean Energy Ministerial Hydrogen Initiative, draws on comprehensive data sources including the IEA Hydrogen Production Projects Database, IEA GHG, and the Hydrogen Tracker to provide a detailed analysis of hydrogen’s production, cost trends, policy frameworks, and infrastructure readiness across regions.
Production Outlook to 2030
According to the IEA, low-emissions hydrogen capacity by 2030 is projected at 37 million tonnes per annum (Mtpa)—a downward revision from earlier forecasts due to project delays and cancellations. However, projects that have reached final investment decisions are expected to scale production fivefold, reaching 4.2 Mtpa by 2030, equivalent to nearly 4% of global hydrogen supply.
Regions such as China and Europe are leading deployment efforts in electrolyser capacity and renewable integration, while other regions lag behind, constrained by financing, policy clarity, and infrastructure gaps.
Cost Disparities Across Regions
The IEA’s cost analysis reveals a persistent gap between low-emissions hydrogen and conventional fossil-based alternatives. In regions like China, falling renewable energy prices and supportive financing mechanisms are expected to narrow the gap by 2030. Similarly, Europe’s carbon pricing frameworks help lower the relative cost of clean hydrogen.
By contrast, regions such as the United States and the Middle East may rely more heavily on fossil fuels coupled with carbon capture technologies due to less favourable pricing dynamics.
The review also raises concerns over China’s electrolyser dominance, with 65% of global capacity concentrated in the country. While China’s scale and innovation efforts are accelerating cost reductions, issues related to global standards, maintenance, and efficiency remain challenges for broader adoption.
Demand Creation and Policy Momentum
The IEA notes that demand signals for hydrogen are growing but remain fragmented. Europe’s Renewable Energy Directive (RED) and Japan’s hydrogen strategies are among the most advanced frameworks promoting sector adoption. Shipping, refining, and chemicals are the early adopters of low-emissions hydrogen, but broader market uptake depends on clear policy signals and sector mandates.
Strategic hubs such as Rotterdam and Singapore are being positioned as global centres for hydrogen distribution and fuel bunkering. The IEA recommends governments create robust frameworks for public procurement, sectoral mandates, and financing to accelerate demand creation.
Opportunities in Emerging Markets
The report identifies Africa, Latin America, and Southeast Asia as regions with significant untapped hydrogen potential. These regions could account for 25% of global low-emissions hydrogen supply by 2030, provided investments in infrastructure and financing are prioritised.
However, the IEA warns that financing constraints, underdeveloped infrastructure, and dependence on exports pose significant barriers. Tailored policy frameworks and international partnerships are critical for unlocking these opportunities.
Priority Actions for Governments and Industry
The IEA’s recommendations include:
Accelerating deployment by focusing on projects with established industrial demand.
Strengthening demand creation through mandates, sector targets, and public procurement policies.
Removing infrastructure barriers by streamlining permitting and facilitating investment.
Expanding public financing tools to support first-of-a-kind projects.
Supporting emerging economies by reducing financing costs and developing domestic markets.
Hydrogen’s Strategic Role in Energy Transition
The report concludes that hydrogen is increasingly recognised not just as a fuel alternative but as a cornerstone of global energy security, industrial transformation, and climate action.
“Hydrogen is poised to be a strategic solution that enables decarbonisation, economic growth, and global cooperation,” the IEA’s review states, calling on governments and industries to coordinate efforts to unlock the sector’s potential.