Hydrogen Handbook | 2025
As markets came out of COVID lockdowns in 2020-2021, there was strong investor and societal appetite for cleaner, healthier lifestyles and acceleration of the energy transition. Since then, many growth sectors have been buffeted by supply chain shortages, inflation, high interest rates, and the Russia-Ukraine war. In addition, renewables investors have been unsettled by the sharp reversal of energy transition strategy in the USA, push-back on ESG themes, and the delays in policy implementation in Europe and the UK, where for example there is slow country-level uptake of RED III, and a roll back of ICE phase out in the transport sector. The fossil fuel companies, especially in the UK, have reverted to oil & gas activities, under pressure from shareholders (who had pushed them into energy transition in the first place), and are significantly slowing down their renewables activities. Big Oil essentially is investing in blue and green hydrogen, adjacent to its refinery and CCS footprint, for internal consumption. In terms of green hydrogen projects, a ‘chicken-egg’ has developed where off-takers are reluctant to sign the long-term offtake agreements that are needed for bankable finance, until country level regulations and GHG penalties are in place. This has resulted in a series of project cancellations and delays, which has flowed through into the order books of listed electrolyser and fuel cell companies, and selling pressure on share prices. That said, we are tracking strong progress in clean hydrogen, which is deploying in different market segments and geographies at different rates, depending on fiscal support, customer demand, electricity prices and grid development. By 2027, some 3.0 mtpa of green hydrogen is expected to be in production globally, following investment of some $69 billion, representing a c.15x increase compared to the current green hydrogen market, and predominately used to replace grey hydrogen. This growth is made up of 389 projects, with an average size of 59MW (8 ktpa). These are real projects, past FID and financial close, with construction underway. Demand for this hydrogen is underpinned by refineries and chemicals plants, with additional offtake for transport fleets.
