IEA Reports Hydrogen Sector Growth Despite Recent Setbacks, Investments Reach $8 Billion in 2025

The International Energy Agency (IEA) released its Energy Technology Perspectives 2026 report, stating that low-emissions hydrogen "is no passing fad" despite recent project cancellations, delays, and company bankruptcies in the sector.

The IEA characterized recent corrections as typical for emerging sectors undergoing consolidation before stabilizing. Global investments in low-emissions hydrogen reached $8 billion in 2025, representing an 80% increase year-over-year.

Electrolyser capacity has expanded significantly, growing from 100MW in 2009 to 1GW in 2023, with an expected 5GW by end of 2025. China is projected to account for approximately 40% of this capacity. Based on final investment decisions, global electrolyser capacity could reach 26GW by 2030, with potential expansion to 65GW when including projects likely to be operational by that date—a growth trajectory mirroring solar and offshore wind deployment.

Including other low-emissions production routes, output could reach 4.2 million tonnes annually from committed investments, rising to 10 million tonnes when accounting for likely plants.

The IEA identified challenges including electrolyser cost increases due to inflation and supply chain pressures, though costs may decline with larger scales and operational learnings. The watchdog noted competition from data centres and other energy-intensive sectors for power supply and infrastructure capital.

Governments must provide targeted support to stimulate demand in existing hydrogen applications and build enabling infrastructure, the IEA stated. Some regions, particularly China, are on track to close the cost gap between renewable hydrogen and conventional production by 2030.

Originally reported by Hydrogen Central. Read the full article →