Global Hydrogen Review, 2024 Â | IEAÂ
Global hydrogen demand reached 97 Mt in 2023, an increase of 2.5% compared
to 2022. Demand remains concentrated in refining and the chemical sector, and
is principally covered by hydrogen produced from unabated fossil fuels. As in
previous years, low-emissions hydrogen played only a marginal role, with
production of less than 1 Mt in 2023. However, low-emissions hydrogen
production could reach 49 Mtpa by 2030 based on announced projects, almost
30% more than when the Global Hydrogen Review 2023 was released. This strong
growth has been mostly driven by electrolysis projects, with announced
electrolysis capacity amounting to almost 520 GW. The number of projects that
have reached a final investment decision (FID) is also growing: Announced
production that has taken FID doubled compared with last year to reach 3.4 Mtpa,
representing a fivefold increase on today’s production by 2030. This is split roughly
evenly between electrolysis (1.9 Mtpa) and fossil fuels with carbon capture,
utilisation and storage (CCUS) (1.5 Mtpa).
Hydrogen production from fossil fuels with CCUS has gained ground over the past
year – although the total potential production from announced projects grew only
marginally compared with last year, there were several FIDs for previously
announced large-scale projects, all of which are located in North America and
Europe. As a result, the potential production in 2030 from projects using fossil
fuels with CCUS that have taken FID more than doubled in the last year, from
0.6 Mtpa in September 2023 to 1.5 Mtpa today.
Overall, this is noteworthy progress for a nascent sector, but most of the potential
production is still in planning or at even earlier stages. For the full project pipeline
to materialise, the sector would need to grow at an unprecedented compound
annual growth rate of over 90% from 2024 until 2030, well above the growth
experienced by solar PV during its fastest expansion phases. Several projects
have faced delays and cancellations, which are putting at risk a significant part of
the project pipeline. The main reasons include unclear demand signals, financing
hurdles, delays to incentives, regulatory uncertainties, licensing and permitting
issues and operational challenges.
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