Global Hydrogen Review 2025

Investment and innovation

Highlights

  • Capital spending on low-emissions hydrogen projects reached USD 4.3 billion in 2024, an 80% increase from 2023. Based on recent final investment decisions (FIDs), spending could rise by more than 80% in 2025 to nearly USD 8 billion.
  • In 2024, capital spending was almost evenly split between electrolysis and carbon capture, utilisation and storage (CCUS)-equipped hydrogen production. In 2025, electrolysis is expected to account for 80% of spending but only 56% of production from projects under construction, given its higher capital intensity.
  • Investment in electrolysis-based projects is highest in China and Europe, while the United States allocates a larger share to CCUS-equipped production. Over 50% of total investment in 2024 and 2025 targets hydrogen use in oil refining and industrial facilities with existing hydrogen demand.
  • Guarantees and risk-sharing instruments are essential to scaling up hydrogen projects, particularly for first-of-a-kind deployments and emerging technologies. Collaboration among original equipment manufacturers (OEMs), project developers, public funders and insurers may help reduce perceived risk and strengthen investor confidence.
  • Hydrogen venture capital (VC) fundraising fell by one-third in 2024, outpacing declines in broader energy VC. Publicly traded hydrogen companies have also continued to see lower investor returns and revenues over the past year.
  • Development finance institutions are increasingly backing blended finance structures, with recent disbursements focused on early-stage costs, including projects in Brazil, Egypt, Morocco, Namibia and South Africa.
  • A record number of technologies advanced in technology readiness level (TRL) over the past year, across the hydrogen value chain. First-of-a-kind pilot projects included microwave plasma pyrolysis and synthetic fuel production via Fischer–Tropsch synthesis from solar-converted biogas to syngas, and moving towards larger scale using biogenic CO2. Infrastructure milestones included validation of hydrogen storage in salt caverns with fast cycling and in depleted gas fields, and an industrial-scale ammonia cracker. On the demand side, there were maiden voyages of ammonia-fuelled vessels using combustion engines or fuel cell propulsion with onboard ammonia cracking, and the first direct reduced iron (DRI) production in rotary kilns using iron ore fines and 100% hydrogen.
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