Green hydrogen, once seen as a promising solution for decarbonizing industries, is facing significant setbacks as energy companies scale back climate initiatives and governments struggle to meet decarbonization targets. Although global hydrogen demand reached 100 million tonnes in 2024, driven primarily by the refining and steel sectors, the majority of hydrogen production still relies on fossil fuels. The International Energy Agency (IEA) reports that only 7% of green hydrogen projects are completed on schedule, highlighting the challenges of high costs, inadequate infrastructure, and regulatory barriers.
Despite these hurdles, the potential for green hydrogen remains significant, with projections suggesting it could contribute 4% of global hydrogen production by 2030. Major projects, such as Saudi Arabia’s NEOM Green Hydrogen Project, and technological advancements aimed at reducing production costs could help revive interest in green hydrogen.
Market professionals should note that while the green hydrogen sector is currently under pressure, strategic policy support and technological innovations could unlock its potential, particularly for hard-to-abate industries. The ongoing developments in this space warrant close monitoring for investment opportunities.
Source: oilprice.com