Existing industry and shipping ‘key to faster hydrogen adoption’ – IEA

Existing industrial applications andshipping provide key opportunities for early hydrogen adoption, according to anew International Energy Agency (IEA) report.

The greatest opportunities to adoptlow-emissions hydrogen in Asia include ammonia production in Indonesia,Malaysia, and Vietnam, the report believes.

“The geographical concentration of existingapplications, particularly in countries with large state-owned enterprises,provides a strong foundation for scaling up the sector,” it notes.

“Near-term success will depend onaccelerating the deployment of renewables to reduce production costs,implementing targeted policies for fuel-switching, and developing pilotprojects that enable gradual progress towards commercialisation.”

Nearly 80 ports score more than fiveout of 10 in the IEA’s chemical-handling infrastructure score, which reflectsphysical infrastructure and operational expertise that can enable the adoptionof low-emissions fuels. Of these, 55 ports have “significant nearbyhydrogen supply and high infrastructure readiness.”

Advanced economies could also partner withemerging and developing economies to encourage new domestic use cases (such asfertiliser production) and open export opportunities for hydrogen-basedproducts.

This could enable emerging and developingeconomies to move up the value chain, enhance their energy and food security byreducing import dependencies, and boost economic growth.

Despite the much-reported hydrogenslowdown, the volume of electrolyser projects is growing fast. In 2021, theworld’s largest reached 30MW. In 2025, a 500MW project was commissioned inChina, and Saudi Arabia’s NEOMproject is targeting 2GW to be operative by 2027 – that would be a75-fold increase in the largest project in just six years.

“While challenges remain – including highproduction costs, demand and regulatory uncertainty, and infrastructure gaps –the positive developments significantly outweigh the setbacks,” the reportstates.

Global hydrogen demand reached almost 100Mtin 2024 and is expected to surpass that milestone in 2025. This increase isbeing driven by demand for industrial products that use hydrogen as afeedstock, rather than being the result of successful implementation of energyand climate policies.

Low-emissions hydrogen use increased bynearly 10% in 2024 but remains at less than 1% of total consumption due to costchallenges and insufficient policy support.