This surge in investment is set to increase global hydrogen production fivefold by 2030, with projects now totalling a capacity of 20 GW. However, the IEA warns that demand for hydrogen remains weak, posing challenges for the industry’s long-term growth.
The IEA reports that 6 GW of new hydrogen projects were announced in the past 12 months, with China leading the charge, contributing over 40% of final investment decisions. Despite the rise in projects, only about a quarter of production is met with actual demand, leaving the sector off-track to meet global climate goals.
Fatih Birol, IEA Executive Director, emphasized the need for policymakers to prioritize demand creation, cost reduction, and clearer regulations to accelerate growth in the hydrogen sector.
The IEA projects global hydrogen demand will grow by 3 million tons this year, primarily driven by the refining and chemical sectors. However, most of this demand will be met by hydrogen produced using fossil fuels, with low-emission hydrogen still playing a minor role.
Oman is emerging as a key player in this transition, with Hydrom, the country’s green hydrogen orchestrator, announcing two new projects in Dhofar worth $11 billion. These projects are part of Oman’s ambitious plan to produce 1.38 million tonnes of hydrogen annually by 2030.
