Global investments in clean hydrogen technologies are set to grow by 70% in 2025 to almost $8 billion, despite a wave of high-profile cancellation projects as governments pursue support policies and developers promote projects that have reached a final investment decision, the International Energy Agency said on June 5.
Hydrogen investment increased by 60% in 2024, despite significant difficulties and delays, and the development of all projects that have reached the UFR will require further significant cost increases, the IEA said in the World Energy Investment 2025 report.
"It is successfully developing in all hydrogen projects that have received a feed, which will require investments to increase by another 70%, to almost $8 billion in 2025," he said.
This will lead to an increase in capacity to 7.5 million tons/year by 2035, which is an almost 15-fold increase at current levels.
The hydrogen sector of the economy is experiencing significant consolidation in 2024, with electrolysis investments jumping 90% to $2.5 billion, with even several major projects cancelled or delayed.
"Some hydrogen projects have been canceled or delayed over the past 12 months, but remains on the pipeline of approved projects, requiring about $8 billion in investment in 2025, almost double the level recorded in 2024," the IEA says.
The investment in low-emission hydrogen is part of a broader 30% increase in spending on liquid biofuels, biogas, and low-carbon hydrogen to a record high of almost $25 billion.
The headwind sector
Major setbacks in air product output from the 13,000 ton/year electrolyzer project and a pause in the development of the 600,000 ton/year complex in Louisiana, until the implementation of agreements can be ensured, despite the project's achievement by the UFR in 2023.
Ersted's cancellation of its 50,000 Mt/year FlagshipONE e-methanol project in Sweden, which was in the field of construction, two years after achieving the FID also highlighted the importance of the challenges facing the sector.
At the same time, construction is accelerating according to approved projects, and electrolyzer investments are increasing by 150% in 2025, according to the IEA.
This growth reflects an increase in the scale of production and construction of projects funded in previous years.
"An increasing number of electrolysis cell projects are under construction, including a project in Kakinada, India, which reached the FRA in mid-2024 and produced 1 million tons/year of low-emission ammonia by 2026, mainly for export to Europe," the IEA says.
About a third of investments in hydrogen-based capture, use and storage (CCGT) are concentrated in North America, although some
