Global investment in low-carbon hydrogen will reach a new high this year, but the nascent industry is close to hitting a bureaucratic cap on its growth, an industry group report warned. Cumulative investment since 2020 in projects to manufacture hydrogen using either renewable energy or natural gas paired with carbon capture will reach $130 billion, spread across nearly 600 projects, of which 90% are under construction, according to the Hydrogen Council.
But the pace of new investment slowed this year, and the report concludes that the total volume of hydrogen production currently under construction is greater than the volume of demand currently supported by policy, given that tax credits, clean fuel standards, or other forms of government intervention are required to make most clean hydrogen economically competitive with normal natural gas. “A much larger pool of demand sits close to competitiveness,” the report concludes, “but would require an acceleration of supply cost reductions, additional policy action, and extensive build out of connective trade infrastructure to unlock.”
