Global hydrogen demand up 2% in 2024

The majority of this was met by hydrogen produced from fossil fuels.

The global demand for hydrogen reached 100 million tonnes in 2024, inching up 2% from the previous year.

According to the International Energy Agency’s (IEA) latest report, this slight increase was in line with the overall growth in energy demand.

“The vast majority of this was met by hydrogen produced from fossil fuels without measures in place to capture associated emissions. Sectors that have traditionally used hydrogen, such as oil refining and industry, remained the biggest consumers,” the report said.

IEA noted that the use of fossil fuels to produce hydrogen remains the cheaper option globally. The gap has even widened due to recent declines in natural gas prices and an increase in the price of electrolysers due to inflation and slower-than-expected deployment of the technology.

“However, the report sees the cost gap narrowing by 2030 due to declining technology costs – and, in some regions, strong renewables growth and the enactment of new regulations,” IEA said.

Meanwhile, low-emissions hydrogen uptake is not yet meeting expectations set by industry and governments in recent years. Its growth is being limited by high costs, demand and regulatory uncertainty, and slow infrastructure development.

“New analysis of announced projects finds that low-emissions hydrogen production by 2030 now has the potential to reach up to 37 million tonnes per year. That is down from a potential 49 million tonnes per year, based on announced projects a year earlier,” IEA said.

Despite the expected lower actual capacity, IEA said low-emissions hydrogen production is expected to see a sizable expansion by the end of the decade compared with where it stands today.

Projects that are operational, under construction or have reached a final investment decision by 2030 are set to increase more than fivefold from 2024 levels to more than 4 million tonnes per year. An additional 6 million tonnes per year also has strong potential to become operational by 2030 if effective policies to ensure demand are implemented, the report read.

“China is the driving force today in the deployment of electrolysers to produce low-emissions hydrogen. The country accounts for 65% of global electrolyser capacity that has been installed or reached a final investment decision, and it is home to nearly 60% of the world’s electrolyser manufacturing capacity,” IEA said.