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Global Hydrogen Industry Investment Milestone

The global clean hydrogen sector has recently reached a significant milestone, surpassing 110 billion USD in investments globally as over 500 projects are currently in various stages of development and operation. This achievement marks an increase of 35 billion USD since last year, highlighting the sector's robust growth trajectory. According to the inaugural report from the Hydrogen Council, the Global Hydrogen Compass, which was developed in partnership with McKinsey & Company, the industry has experienced an average annual investment growth rate of 50% since 2020.

This remarkable progress reflects natural fluctuations within the industry, where projects with promising business outlooks advance while less profitable initiatives tend to be withdrawn. Since 2020, more than 1,700 hydrogen projects have been announced globally, indicating a staggering 7.5-fold increase. However, in the past 18 months, approximately 50 projects have been publicly canceled, accounting for around 3% of the overall pipeline, mostly within early-stage renewable hydrogen initiatives. Ongoing structural challenges such as persistently high interest rates and delayed policy implementations in various regions continue to pressurize this selection process.

On the supply side of the equation, the total committed capacity has now surpassed 6 million tons per annum (mtpa), with 1 mtpa already operational. Considering potential delays and expected withdrawals, the current project pipeline could yield an output of between 9 to 14 million tons per annum of clean hydrogen by 2030, provided that sufficient demand materializes. However, fostering this demand remains the next great challenge; currently, approximately 3.6 million tons per annum are under binding contracts.

As policy certainty emerges in key markets such as the EU, US, Japan, and South Korea, demand for clean hydrogen could surge to upwards of 8 million tons per annum by 2030.

China leads the world in committed investments, totaling 33 billion USD, and in renewable hydrogen production, maintaining over 50% of global renewable capacity. North America follows with 23 billion USD, home to 85% of the world’s low-carbon hydrogen production. Europe ranks third in terms of committed investments, totaling 19 billion USD, addressing nearly two-thirds of the expected global demand by 2030.

The Global Hydrogen Compass builds on the Hydrogen Council's Hydrogen Insights series released in 2021, offering a clear, fact-based overview of the global hydrogen industry’s current state. This publication uniquely combines comprehensive industry data with insights from executives worldwide and experiences from some of the world’s foremost hydrogen projects, sending a message of confidence, clarity, and urgency from industry leaders. Despite a challenging environment, the majority of surveyed executives reported stable or increased investment readiness over the past two years (74%), believing that hydrogen will be a critical decarbonization solution for hard-to-abate sectors (97%) and the broader economy (65%), anticipating further growth in the sector (83%).

Key Insights from Industry Leaders

Jaehoon Chang, Vice-Chairman of Hyundai Motor Group and Co-Chair of the Hydrogen Council, emphasized that the Global Hydrogen Compass sends a strong signal of industry readiness to transition from ambition to execution. With over 500 projects having achieved Final Investment Decision (FID) and commitments exceeding 110 billion USD, the progress is tangible. However, this milestone also underscores the work that lies ahead. Sustained political support and effective implementation are crucial for maintaining momentum and unlocking the full potential of hydrogen towards a clean, resilient, and secure energy future.

Sanjiv Lamba, CEO of Linde and Co-Chair of the Hydrogen Council, remarked on the immense progress the industry has made over the past five years, proving its capacity for innovation and scalability. The Global Hydrogen Compass indicates that the sector is at a pivotal juncture; accelerating market establishment and securing binding purchase agreements must become priorities to ensure the efficacy of current projects. Enhanced collaboration between businesses and governments is essential for establishing the frameworks and partnerships necessary for progress. By aligning efforts, the hydrogen industry can harness its full capacity to confront the challenges ahead.

Ivana Jemelkova, CEO of the Hydrogen Council, stated that the first report of the Global Hydrogen Compass captures the immediate insights of executives globally, offering solid industry data complemented by insights from pivotal hydrogen projects. It illustrates the steady growth trajectory of the industry over the last five years, providing clarity and confidence needed by businesses, investors, and policymakers as the sector gears up for the next expansion phase.

Conclusion

The Global Hydrogen Compass is poised to become a fundamental annual publication by the Hydrogen Council, illuminating the advancements and priorities within the global hydrogen industry. Building on the insights series launched in 2021, this report presents a clear, data-driven perspective on the sector’s evolution. For further information and interactive insights, please visit compass.hydrogencouncil.com.

About the Hydrogen Council

The Hydrogen Council is a global initiative led by executives with a common vision and long-term goal of hydrogen accelerating the energy transition. It comprises about 140 companies from over 20 countries across North and South America, Europe, Africa, the Middle East, and the Asia-Pacific region.