Market outlook

The hydrogen market at a crossroads

Although the number of hydrogen projects in the world declined in 2025, technological progress, new use areas and growing investment needs all continue to point to the same thing: hydrogen will be a key tool for stabilizing the energy system, reducing emissions and strengthening industrial resilience in times of geopolitical turmoil.

The global hydrogen market has undergone a drastic transformation over the past decade, with several factors combined resulting in a rapid increase in investments and technological development. One such factor is the stricter political and regulatory frameworks introduced in many countries to stimulate the transition and create a more stable base for long-term demand, making it safer for companies to invest resources in the industry’s development.

The growing international ambition to reduce emissions also plays an essential role. As nations introduce more ambitious climate requirements and long-term goals for net-zero emissions, the need for low-carbon solutions is growing in areas that previously lacked such options. Hydrogen is thus well-positioned as a key transitional technology in these areas.

Greater demand but lower expectations

However, the situation becomes less optimistic when developments in recent years are taken into consideration. While global demand for hydrogen increased to nearly 100 million tons in 2024, a wave of project delays and cancelled investments has lowered expectations regarding the pace at which low-carbon hydrogen production can be rolled out. For the first time, we are seeing a decrease in the number of production projects for low-carbon hydrogen.

At the same time, technological breakthroughs are continuing to bring costs down and improve the reliability of hydrogen solutions. Improvements in electrolysis, larger-scale component manufacturing, better integration with carbon capture, and more advanced digital controls have collectively made production more competitive. This progress has not only led to a better financial performance, but is also paving the way for broader use in industrial processes, energy storage and vehicle technology.

Despite these advances, however, certain barriers remain. The current limitations in global infrastructure are creating bottlenecks. While there are several hydrogen hubs around the world, expansion is progressing slowly. Estimates suggest that several trillion dollars in hydrogen infrastructure investments could be required before the middle of the century, providing a good illustration of the potential and scope of the task involved.

Hydrogen could increase regional resilience

At the same time, there are significant opportunities emerging, particularly within energy storage and transportation. Hydrogen can store large amounts of energy for long periods of time, making it the ideal technology to stabilize power grids based on sources with variable output such as solar or wind power. The ability to increase the resilience and self-sufficiency of the energy sector is crucial in times of geopolitical uncertainty. Rapidly rising energy costs due to wars provides further incentive to create a system that ensures energy supply – the perfect use case for hydrogen technology in combination with renewable energy.

There is also growing interest in fuel cells in the area of mobility. They can be used in vehicles where batteries have limited range or are too heavy, such as trucks, buses, trains, ships and, perhaps in the future, aircraft. The expansion of refueling stations and progress in fuel cell development are widening the market and creating new business opportunities for players across the value chain.

Towards a more robust energy system

These developments also support the emergence of a more coherent hydrogen-based energy system. Converting surplus electricity from renewable sources into hydrogen through electrolysis so that it can be used again in fuel cells reduces the dependence on volatile energy prices and sensitive import chains. More efficient production and industrialization of these plates – through faster, more resource-efficient manufacturing methods – are key steps in achieving scalability and keeping costs down throughout the chain.

These changes in the market and technology collectively are creating a more robust energy system, where hydrogen provides a flexible and future-proof complement to other energy carriers. Overall developments indicate that the market is now undergoing a shift driven by policy changes, climate requirements and technological innovations. While significant barriers remain, not least in terms of security, infrastructure and coordination, the outlook is strong. If the current trend continues, hydrogen could play a key role in the long-term transition of the energy and industrial sector.