Financial investment decisions on low-emission hydrogen projects have doubled in the past 12 months, leading to a potential 20-gigawatt electrolyser pipeline, the IEA said Wednesday.

Yet, the new project wave momentum isn’t necessarily good news for the industry, as there’s a long road till these projects materialise into installed capacity, Kallanish notes.

According to the IEA’s newly published Global Hydrogen Review 2024 report, the new FIDs would increase today’s global production of low-emission hydrogen fivefold by 2030. If all announced projects are realised worldwide, total production could reach nearly 50 million tonnes/year by decade-end, it says.

“However, this would require the hydrogen sector to grow at an unprecedented compound annual growth rate of over 90% between now and 2030, well above the growth experienced by solar PV during its fastest expansion phases,” the IEA warns.

For hydrogen to play a critical role in decarbonising industrial sectors, there needs to be more than investor interest in reducing emissions from industries such as steel, refining and chemicals, the report suggests. Increased policy support, demand certainty and cost reduction are key to enabling hydrogen projects to advance.

“For these projects to be a success, low-emissions hydrogen producers need buyers,” explains IEA executive director Fatih Birol. “Policymakers and developers must look carefully at the tools for supporting demand creation while also reducing costs and ensuring clear regulations are in place that will support further investment in the sector.”

Currently, governments around the world target the production of 43 million tonnes of low-emission hydrogen by 2030. Yet, according to the report, demand targets only total 11m t/y. This gap must be closed, the IEA says, noting that the progress made in the hydrogen sector to date “is not sufficient to meet climate goals.”

Of the more than 6 GW of electrolyser capacity to reach FID in the past year, China accounts for over 40%.