The Global Hydrogen Review 2024 reveals a complex and opportunity-rich outlook for the hydrogen sector, highlighting technological advances, demand growth and challenges faced by countries and regions around the world. As governments and businesses seek solutions to decarbonize their economies, low-emission hydrogen is emerging as a key player in the energy transition, but it still depends on a number of factors to establish itself as a viable and economically competitive alternative.
Growing Demand and Expanding Projects
In 2023, global demand for hydrogen reached 97 million tonnes (Mt), an increase of 2.5% compared to the previous year. This growth was largely driven by the refining and chemical sectors, which remain the main consumers of this energy source. However, low-emission hydrogen production is still marginal, representing less than 1 Mt. The report indicates that, by 2030, production of this type of hydrogen could reach 49 Mt per year, with much of this increase driven by electrolysis projects. Global announced capacity for electrolysis already totals 520 GW, highlighting significant growth in projects that have reached final investment decisions, which has doubled to 3.4 Mt per year. This expansion is balanced between electrolysis technologies and processes with carbon capture, utilization and storage (CCUS).
Innovation and Cost Reduction
Since 2016, government investment in hydrogen technology research and development has grown, driving advances, particularly in electricity generation and shipping. Despite this progress, the cost of producing low-emission hydrogen remains high. The report suggests that as demand increases and technology develops, costs could be halved by 2030 , making this energy source more competitive with traditional fossil fuels.
China's Leading Role in the Electrolyzer Market
China once again stands out as the global leader in the electrolyzer market, accounting for 40% of final global investment decisions in 2024 and accounting for 60% of the manufacturing capacity for these equipment. The entry of large Chinese manufacturers, which already dominate the solar panel market, has contributed to reducing the costs of electrolyzers, replicating the success seen in the solar photovoltaic and battery industries. This strategic move puts pressure on other regions, such as Europe and India, which have also invested in expanding their electrolysis capacities to compete in the emerging market.
Latin America: Potential and Challenges for Low-Emission Hydrogen
Latin America emerges as a region with great potential for low-emission hydrogen production , taking advantage of its abundant renewable energy resources and a largely decarbonized electricity matrix. According to the report, projects announced to date indicate that the region could reach production of more than 7 Mt per year by 2030. However, realizing this potential will require a substantial increase in electricity generation capacity and robust investment in infrastructure, especially in transmission lines.
In Brazil, Petrobras has set a target of reducing its emissions by 30% by 2030, based on 2019, and has included US$300 million in investments in CCUS in its planning. The company has also declared an investment of US$1 billion in a fund to reduce scope 1 and 2 emissions. In addition, it is increasing (from 15% in 2024 to 30% in 2028) its investments in RDI in low-emission technologies and took an important step by joining the Brazilian Hydrogen Association (ABH2), signaling its commitment to the development of the sector. The report highlights the natural hydrogen research in Maricá, conducted by LabH2 at Coppe/UFRJ, and indicates that the country demonstrates the capacity to integrate cutting-edge technologies to foster sustainable production, positioning itself as a regional leader in the energy transition.
What's Ahead: Challenges and Opportunities
The future of low-emission hydrogen will depend on a coordinated effort between governments, businesses and consumers. To stimulate local and regional markets, governments need to leverage industrial hubs as demand hubs and implement policies such as carbon quotas and contracts for difference. In addition, public procurement of end products that use low-emission hydrogen could be a crucial step in accelerating the early adoption of this technology. However, for this strategy to work, businesses and consumers must be willing to pay even a modest premium for sustainable products.
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