The Future of Hydrogen Production in Global Industry

Global hydrogen production reached 97 million tonnes (Mt) in 2023, though the International Energy Agency (IEA) reports that less than 1% of that volume was produced using low-emissions methods. While hydrogen is central to various industrial processes, the transition to cleaner production methods is progressing more slowly than initial expectations.

Based on announced projects, low-emissions hydrogen production could reach 49 million tonnes per annum (Mtpa) by 2030. This figure represents an increase from the 38 Mtpa projection shared in the Global Hydrogen Review 2023.

Electrolyser Capacity and Deployment

Water electrolysers, which use electricity to split water into hydrogen and oxygen, are a primary technology for low-emissions production. Installed capacity for these systems reached 1.4 gigawatts (GW) by the end of 2023 and was projected to reach 5 GW by the end of 2024.

China currently leads the sector in terms of committed projects and could account for nearly 70% of the total capacity by the end of 2024. While announced projects suggest that global capacity could grow to nearly 520 GW by 2030, only 4% of those projects have reached a final investment decision (FID) or are currently under construction.

According to the Global Hydrogen Review 2024, approximately 6.5 GW of electrolyser capacity reached FID in the 12 months prior to the report. This figure was nearly 12% lower than the 12-month period preceding the Global Hydrogen Review 2023.

The distribution of these final investment decisions shows a heavy regional concentration:

• More than 40% of the capacity is located in China.
• 32% of the capacity is located in Europe, which experienced a four-fold increase compared to the previous 12-month period.

Most committed projects are focused on industrial applications or the production of hydrogen-based fuels for the transport sector.

Alternative Production and Investment Barriers

Beyond electrolysis, the industry is pursuing fossil-based production combined with carbon capture, utilisation and storage (CCUS). For this specific pathway, 14% of the announced potential production has reached FID, a growth boosted by an acceleration of investment decisions in the 12 months leading up to the 2024 review.

By September 12, 2025, the IEA noted in its Global Hydrogen Review 2025 that low-emissions hydrogen projects had expanded from a few demonstrations to more than 200 committed investments. These projects are increasing in both number and scale, reflecting the role of hydrogen in industrial competitiveness, energy security, and climate goals.

Despite this growth, the sector faces significant headwinds. The IEA identifies several barriers preventing faster deployment, including uncertainties regarding costs, the readiness of necessary infrastructure, and the evolution of regulatory frameworks.

Global Energy Context

The scale of hydrogen’s role in the global energy system is significant. Data from the International Renewable Energy Agency (IRENA) indicates that hydrogen is equivalent to 3% of global final energy demand, a volume similar to the total annual energy consumption of Germany.

As the industry moves toward 2030, the focus remains on bridging the gap between announced project potential and actual construction. The current disparity—where only a small fraction of electrolyser projects have reached FID—highlights the technical and financial challenges associated with scaling cleaner hydrogen production to meet global industrial needs.