IEA lowers green hydrogen production forecast for 2030 by 25%

The International Energy Agency (IEA) has lowered its forecast for low-carbon hydrogen production in 2030 by almost a quarter. According to the new review, the expected volume will be about 37 million tons per year, while last year’s forecast was 49 million tons. This adjustment is due to project delays, cancellations, financial difficulties, and instability in energy policies, Reuters reports.

Despite the reduction in plans, confirmed capacities that are already in operation, under construction, or have a final investment decision will increase more than fivefold compared to 2024 and exceed 4 million tons per year in 2030. An additional 6 million tons are possible only with active government support, including demand creation and infrastructure development.

Cost remains the main barrier to green hydrogen. In recent months, falling natural gas prices have once again made traditional hydrogen more economically viable, while rising electrolyzer costs have hampered the development of low-carbon projects. However, the IEA expects this gap to narrow by the end of the decade thanks to cheaper technologies and the rapid development of renewable energy.

China is currently the largest producer of electrolysis equipment, accounting for 65% of capacity under development and 60% of global production. However, excess production volumes may also pose challenges for Chinese companies.

The IEA names Southeast Asia as one of the most dynamically developing regions. Projects announced there envisage the production of 430,000 tons of hydrogen per year by 2030, compared to only 3,000 tons today.

It should be noted that ArcelorMittal recently confirmed the cancellation of plans to build a direct reduced iron (DRI) plant and a hydrogen facility in Dunkirk, France. The company cites the unprofitability of the investment, given the prices of gas and green hydrogen.