#None #investment growth #clean hydrogen #Hydrogen Council

Major Milestone for the Global Hydrogen Industry

The clean hydrogen sector is celebrating a groundbreaking achievement with more than $110 billion in committed investments across over 500 projects around the world. This impressive total reflects a substantial increase of $35 billion from the previous year, marking a significant progression for an industry that has seen yearly growth rates of 50% since 2020.

Growth and Maturation of the Sector

The progress in the hydrogen sector is underscored by the completion of many projects that have successfully navigated through the final investment decision (FID), construction phases, or are now operational. This growth has occurred alongside the natural attrition of projects, where only those with robust business plans advance, while less viable initiatives are withdrawn from the pipeline. Over the past three years, over 1,700 hydrogen projects have been globally announced, showcasing a 7.5-fold increase. However, the cancellation of approximately 50 projects—accounting for roughly 3% of the total pipeline—indicates the challenges faced by early-stage renewable hydrogen ventures.

Despite the optimism, the sector faces structural challenges, particularly high-interest rates and delays in policy implementation, which pressure project selection. Currently, the total committed capacity is projected to exceed 6 million tonnes per year (mtpa), with 1 mtpa already in operation. When factoring in expected project delays and natural attrition, the current pipeline could support anywhere from 9 to 14 mtpa of clean hydrogen capacity by 2030. This potential, however, relies heavily on demand generation, which has yet to be realized in its full capacity.

Market and Regional Insights

On the demand side, there is around 3.6 mtpa of binding offtake secured, and with clearer policies emerging in critical markets such as the EU, US, Japan, and Korea, up to 8 mtpa of demand could be realized by 2030. China currently leads global investments with $33 billion, as well as over 50% of the world’s renewable hydrogen production capacity. North America follows closely with $23 billion, contributing to 85% of low-carbon hydrogen production, while Europe ranks third with $19 billion in committed investments, representing nearly two-thirds of projected global demand by 2030.

Report Highlights and Future Outlook

The recently released Global Hydrogen Compass, produced by the Hydrogen Council in collaboration with McKinsey & Company, leverages extensive industry data alongside insights from global CEOs, mapping the hydrogen sector's evolution. It reveals that a vast majority of CEOs (74%) have maintained or increased their investment appetite over the past two years, with 97% affirming that hydrogen will be key in decarbonizing hard-to-abate sectors. Furthermore, 83% of industry leaders predict continued growth in the hydrogen market.

Jaehoon Chang, Vice-Chair of Hyundai Motor Group and Co-Chair of the Hydrogen Council, emphasizes that this milestone signifies a shift from merely ambitious goals to tangible results. As more than 500 projects progress, it represents clear evidence of advancement, yet stresses the need for consistent policy support and effective execution.

Sanjiv Lamba, CEO of Linde, highlights the necessity of enhancing collaboration between business and government to aid market creation and secure binding agreements, crucial for delivering real impacts. The overall sentiment among CEOs reflects optimism as they navigate this pivotal moment for the hydrogen industry.

Conclusion

The Global Hydrogen Compass serves as a critical resource for businesses, policymakers, and investors needing insights into this burgeoning sector. As hydrogen emerges as a viable solution for energy transition, its growth is poised to accelerate, provided that the necessary frameworks and partnerships are developed to navigate forthcoming challenges.

For more detailed insights and statistics, visit compass.hydrogencouncil.com.