Global Low-Carbon Fuel Production Forecast Slashed To 37 Million Metric Tons By 2030 

ABUJA  – Global projections for low-carbon fuel production have plummeted to 37 million metric tons per year by 2030, a sharp decline from last year’s estimate of 49 million, according to the International Energy Agency’s (IEA) latest Global Hydrogen Review. 

This 24% drop, driven by project cancellations, rising costs, and policy uncertainties, casts a shadow over the global push for sustainable energy and raises critical questions about the feasibility of meeting climate targets. 

Despite the setback, the IEA reports that low-carbon hydrogen capacity—encompassing projects already operational, under construction, or at final investment decision—is set to surge more than fivefold from 2024 levels, reaching over 4 million tons annually by 2030. 

An additional 6 million tons could be achieved if governments bolster demand through robust policies and faster infrastructure development. 

However, actual output may fall short, as not all announced projects are likely to materialize. 

Cost competitiveness remains the primary barrier. Falling natural gas prices have made fossil-based hydrogen cheaper, while rising electrolyser costs have strained low-carbon projects. 

The IEA projects that this cost gap could narrow by 2030 as technology improves and regions with strong renewable energy growth, supported by new regulations, enhance cost structures. 

China dominates the low-carbon hydrogen landscape, accounting for 65% of global electrolyser capacity and nearly 60% of worldwide manufacturing. Low-carbon hydrogen, produced via electrolysis powered by renewable energy, is a cornerstone of the energy transition. 

However, manufacturers outside China face financial pressures due to high costs and sluggish demand, while Chinese firms grapple with overcapacity, with more than 20 gigawatts of annual manufacturing capacity exceeding current needs. 

Notably, the IEA found no significant cost advantage for Chinese-made electrolysers when factoring in transport and tariffs for international markets. 

Southeast Asia is emerging as a key player, with announced projects signaling a rise in low-emissions hydrogen production from just 3,000 tons today to 430,000 tons per year by 2030. 

As the world races to decarbonize, the IEA underscores the urgent need for stronger policies, cost reductions, and global cooperation to keep the low-carbon fuel transition on track.