Global hydrogen production remains dominated by unabated fossil fuels. Low-emissions hydrogen production reached almost 1 Mt in 2025 and is expected to register record growth in 2026, accounting for more than 1% of global production, strongly concentrated in China, Europe and North America.

Installed electrolysis capacity doubled in 2025 to surpass 4 GW, thanks to the commissioning of several large-scale projects in China. More than 2.5 GW are under construction, targeting operation in 2026. Growth is expected mostly in Europe, with 2 GW, but is highly concentrated in a small number of big projects.

One large project for production from fossil fuels with carbon capture, utilisation and storage (CCUS) started operation in 2025. Two smaller projects are expected for 2026, but several have been postponed due to delays in CCUS infrastructure.

Investment momentum slowed in 2025. New final investment decisions (FIDs) dropped below 0.8 Mtpa after two consecutive years at around 1 Mtpa. Recent policy developments in China can reinvigorate investment, but lack of demand and regulatory barriers lead to an uncertain outlook in the rest of the world.

Committed production grew by 3%, reaching 4.3 Mt by 2030, which could increase to more than 6 Mt if projects with strong potential to be operational by 2030 reach FID in 2026 or 2027. However, the project pipeline shrunk by 10 Mt to 27 Mt by 2030, driven by delays expected after 2030, projects temporarily paused and cancellations. More than 100 GW of announced electrolysis capacity could lose any chance of being in operation by 2030 if investment decisions are not taken before the end of 2027.

Electrolyser manufacturing is entering a consolidation phase, due to slow market development. China leads electrolysis manufacturing thanks to low costs and experience with large projects, but some signs of consolidation are also arising there, due to unsustainable domestic competition driven by excess capacity and offers below manufacturing costs. As a response, many manufacturers are looking to expand markets outside of China.

In the near term, fossil-based production will remain less costly than renewable hydrogen in most parts of the world. Fossil price volatility can significantly reduce the cost gap during some periods, but this will not be enough to unlock FIDs and support policies will remain necessary for the near future.