The oil and gas supply shock amid the Middle East conflict has accelerated cumulative global investments in clean hydrogen to above $130 billion across more than 570 projects, as energy security has become a key driver of uptake alongside industrial growth and decarbonization targets, the Hydrogen Council said in a new report on Thursday.
Total committed investment has topped $130 billion for 6.9 million tons per annum (mtpa) of capacity, the industry-led association said in its Global Hydrogen Compass 2026 report.
Moreover, operational capacity has jumped by 70% this year to 1.7 mtpa and is set to double next year as projects under construction come online, the Hydrogen Council said.
China remains the biggest market for clean hydrogen development. It accounts for the largest share of committed hydrogen investment at $44.5 billion, of which about $12 billion advanced to final investment decision (FID) over the past year, according to the report.
Europe has the second-largest cumulative investment in renewable hydrogen capacity, with about $30 billion, over half of which is dedicated to hydrogen end-uses.
While decarbonization remains a critical global driver of clean hydrogen investment and projects, the current momentum is being driven by energy security and hydrogen has become a strategic resilience lever, the Hydrogen Council said.
However, green hydrogen production via electrolysis with renewable energy remains expensive and has failed to live up to the hype in recent years, with a major gap between planned and actually launched projects amid high costs and struggles to secure offtake deals.
The Middle East crisis is renewing interest in hydrogen and hydrogen-based fuels as options to strengthen energy security in the long term, but low-emissions hydrogen remains far from the scale required to provide an immediate response, the International Energy Agency (IEA) said in its annual Global Hydrogen Review in June.
“Persistent barriers including high costs, uncertain demand, complex regulations and a lack of infrastructure continue to slow the development of low-emissions hydrogen, putting 2030 targets announced by governments increasingly out of reach,” the agency noted.
By Tsvetana Paraskova for Oilprice.com
