The sector is on track to grow from less than 1% of total production today to around 4% in 2030, which the IEA says is “strong” for a nascent sector.

“If achieved, this would make growth in low-emissions hydrogen production comparable to the fast expansions of other clean energy technologies seen in recent years,” it states.

Realising projects will depend on policy action to address key barriers, particularly support for closing the cost gap with hydrogen from unabated fossil fuels and measures to stimulate demand in sectors where hydrogen is already used, such as refining and the chemical industry.

China, Europe, India and North America account for close to 90% of the committed production to 2030.

Other regions are lagging and production at scale will probably only occur after 2030, despite a current project pipeline that could yield more than 15 million tonnes of output.

Enduring challenges relating to high production costs, unclear and complex regulations, and limited available infrastructure continue to hinder development.

“Perhaps the most significant issue, however, is uncertainty around demand,” the report adds. “Stable, predictable demand is a key lever for investment in low-emissions hydrogen projects, since producers need assurances that they will be able to sell on their output.”

“Increasing firm offtake agreements requires policy action, but so far this has been largely insufficient, geographically limited and, on many occasions, the details of their implementation remain uncertain.”