Global Hydrogen Review 2026: Detailed Analysis and Implications for Vietnam

June 19, 2026 by Annie Nguyen

Executive Summary

The Global Hydrogen Review 2026, published by the International Energy Agency (IEA), presents a comprehensive assessment of the global hydrogen landscape amid heightened geopolitical tensions. This sixth edition of the annual report offers critical insights into hydrogen demand, production, investment, policy frameworks, and infrastructure development, with particular emphasis on the impacts of the Middle East conflict on global supply chains and the pivotal role of China in the hydrogen revolution.

I. GLOBAL HYDROGEN MARKET OVERVIEW

1. Hydrogen Demand

2025 Data:

• Global hydrogen demand surpassed 100 million tonnes (Mt) for the first time, growing nearly 3% year-on-year.

• Traditional applications (refining, ammonia, methanol, steel production) accounted for virtually all demand.

• China remains the largest hydrogen consumer with nearly 30% of global demand, followed by North America (16%) and the Middle East (15%).

• New applications (transport, synthetic fuels, power generation) exceeded 1% of total global demand for the first time.

2030 Projections:

• Global demand could reach over 110 Mt.

• New applications will account for over 4% of total demand, driven primarily by biofuels production and hydrogen-based fuels.

2. Hydrogen Production

Technology	2025	2026 (Estimated)
Unabated fossil fuels	~99% of production	~99%
Low-emissions hydrogen	~1 Mt (~1%)	~1.2 Mt (>1%)
Growth rate	+20%	+30%

Electrolysis Capacity:

• 2025: Doubled to exceed 4 GW.

• 2026: Over 2.5 GW under construction, primarily in China and Europe.

• 2030 (forecast): Approximately 50 GW with strong potential to be operational, well below government targets.

3. Investment

2025:

• Capital spending on low-emissions hydrogen projects reached nearly USD 7 billion, double 2024 levels.

• Electrolysis investment overtook CCUS-based hydrogen for the first time.

• 2026 projection: Spending expected to reach nearly USD 10 billion.

Venture Capital:

• Continued decline from a peak of 13% of energy VC (2023) to 4% (2025).

• Aviation sector attracted nearly 25% of total hydrogen VC.

4. Project Pipeline

2030 Outlook:

• Announced project capacity: 27 Mt (down 10 Mt from 2025 review).

• Committed projects (operational, under construction, or FID): 4.3 Mt.

• Projects with strong potential: >6 Mt if FID reached by 2026-2027.

China is the only country on track to meet its 2030 production target (300 kt renewable hydrogen), potentially achieving it as early as 2027.

II. MIDDLE EAST CONFLICT IMPACT ON HYDROGEN SUPPLY CHAINS

1. The Middle East's Role in Hydrogen Markets

Product	Global Production Share	Global Trade Share
Ammonia (NH₃)	~11%	>25%
Urea	~13%	~40%
Methanol	~17%	~45%
Hydrogen	~16%	-

2. Consequences for Global Markets

• Urea prices doubled between January and May 2026.

• Methanol prices increased 60% in the same period.

• Fertilizer plants in Qatar and Iran halted production.

• Plants in Bangladesh, India, and Slovakia reduced output due to gas shortages.

3. Food Security Implications

Approximately 60% of urea exports and 70% of ammonia/methanol exports from the Middle East pass through the Strait of Hormuz, severely impacting import-dependent nations:

• Morocco: 40% of ammonia imports from the Middle East.

• Brazil: Nearly 40% of urea imports from the Middle East.

• India: Imports ~4.8 Mt of urea from the Middle East.

III. KEY BARRIERS TO LOW-EMISSIONS HYDROGEN

1. Cost Gap

Hydrogen Production Costs (2025):

Pathway	Cost (USD/kg H₂)
Natural gas (unabated)	<1 - 4+
Natural gas + CCUS	1.4 - 5
Electrolysis (renewable)	>3 - 12+
Electrolysis (China)	~3 - 5

2030 Projected Costs (China & optimal locations):

• China: <2 USD/kg

• Australia, US: ~2.5-3.5 USD/kg

• Middle East, India, Chile: ~3-4 USD/kg

• Europe: ~3.5 USD/kg (under optimal conditions)

2. Cost of Capital

The weighted average cost of capital (WACC) can account for 30-40% of hydrogen production costs. Each 1 percentage point increase in WACC adds approximately USD 0.2/kg H₂ to production costs.

3. Demand-Side Barriers

• New offtake agreements in 2025: ~1.7 Mt, unchanged from 2024.

• Only 20% of new agreements are firm offtake contracts.

• For the first time, trade-oriented agreements exceeded domestic use agreements.

IV. SECTORAL DEEP DIVE

1. Refining

2025:

• Hydrogen demand in refining: 44 Mt (+1%).

• Low-emissions hydrogen use: <250 kt (less than 1%).

2030 Outlook:

• Low-emissions hydrogen production for refining: >500 kt from committed projects.

• Europe leads adoption due to RED policy framework.

RED Directive Impact:

• 13/27 EU member states have transposed RED transport targets.

• 70% of EU refining capacity in countries allowing RFNBO counting.

• Generates at least 575 ktpa of demand.

2. Industry

Sector	Hydrogen Demand 2025	Growth
Ammonia	~34 Mt (60%)	+1%
Methanol	~16 Mt (30%)	+8%
Steel (DRI)	~5 Mt (10%)	+4%

Low-emissions hydrogen in industry:

• 2025: 420 kt (+35%).

• 2030 (committed projects): 2.0 Mt.

• 75% from electrolysis, 45% targeting ammonia production.

3. Road Transport

2025:

• Hydrogen demand: 170 kt (+30%).

• Fuel cell trucks: accounted for 70% of demand.

• Global FCEV stock: ~130,000 vehicles.

China's City Cluster Program:

• Budget: CNY 8 billion (~USD 1.1 billion) .

• Target: 100,000 FCEVs by 2030.

• End-use hydrogen price target: <CNY 25/kg (~USD 3.5), striving for CNY 15/kg (~USD 2.1).

South Korea:

• USD 390 million subsidy program for 8,000 FCEVs.

• Plans for 660 hydrogen refueling points by 2030.

4. Shipping and Aviation

Shipping:

• 100+ dual-fuel vessels (methanol/ammonia).

• Cumulative offtake agreements: >800 ktpa H₂-eq.

Aviation:

• EU mandates 1.2% e-SAF from 2030.

• UK: 0.2% from 2028, 0.6% from 2030.

• e-SAF production costs: >USD 8,300/tonne, 10 times fossil kerosene.

5. Power Generation

• Hydrogen/ammonia-fired power capacity: 520 MW (+25%).

• 2030 projection: 6,800 MW (down 10% from 2025 forecast).

V. TECHNOLOGY AND INNOVATION

1. Electrolyser Manufacturing Landscape

Region	Manufacturing Capacity (2025)	Projected 2030
China	>35 GW/year	~50 GW/year
Europe	~12 GW/year	~20 GW/year
US	~6 GW/year	~15 GW/year
India	Expanding	~10 GW/year

Electrolyser Cost Trends:

• China: USD 500-1,100/kW

• Western markets: USD 1,900-2,500/kW

• 2030 Western projection: USD 1,500-1,900/kW

2. Notable Technological Breakthroughs

• Iridium reduction: From 300 kg/GW to 56 kg/GW.

• 2.6 MW SOEC electrolyser operational in Netherlands.

• Centrifugal hydrogen compressor: 1/7 size reduction, 3-4% energy savings.

• Liquid hydrogen marine engines: Successful land-based trials.

VI. INFRASTRUCTURE DEVELOPMENT

1. Hydrogen Pipelines

Announced projects: >40,000 km by 2035.

• Committed investment: Only 9% (~3,600 km).

• Growth: 70% increase since 2025.

Notable Projects:

• Germany: 400 km gas pipeline repurposing (Flow project).

• China: Kangbao-Caofeidian pipeline 1,038 km - world's longest.

2. Underground Storage

• Projected 2035 capacity: 11 TWh (335 kt H₂).

• Only 7% has reached FID or construction.

• US: Delta ACES project - 370 GWh.

• Germany: Epe-H2 project - 115 GWh.

3. Port Infrastructure

• 170+ ammonia terminals operational.

• 130+ methanol terminals operational.

• New port projects concentrated in China, South Korea, Singapore.

VII. COST ACCEPTABILITY ANALYSIS

1. Concept

Maximum acceptable hydrogen cost represents the maximum amount users can pay for low-emissions hydrogen while maintaining parity with incumbent pathways.

2. Key Findings

Without policy support:

• Acceptable hydrogen cost:  for most sectors/regions.

• For steel: hydrogen cost must be negative (requires subsidies).

With carbon pricing:

• Carbon price of USD 150/t CO₂ can significantly improve competitiveness.

• Greatest impact: steel and refining.

Regional variations:

• China: Smallest cost gap.

• EU and Japan: Highest acceptable costs but largest cost gaps.

• North America: Lowest acceptable costs due to cheap energy.

3. Abatement Cost Curves

• ~45% of low-emissions hydrogen demand could be achieved with abatement costs  (Net Zero Scenario).

• ~2/3 of this demand is in China, primarily in the industrial sector.

• EU has lower abatement costs due to high costs for both incumbent and low-emissions routes.

VIII. GLOBAL POLICY LANDSCAPE

1. Strategies and Targets

• 66 countries have adopted hydrogen strategies.

• Only China and Netherlands on track for 2030 targets.

• Target revisions: Chile (25 GW → 8-15 GW); Netherlands (3-4 GW → 1.2 GW).

2. Public Funding

Total new funding since GHR-2025: USD 41 billion

• ~95% from advanced economies.

• USD 1.5 for supply : USD 1 for demand.

• ~25% already disbursed.

3. Policy Instruments

Instrument	Characteristics	Examples
Contracts for Difference (CfD)	Revenue certainty	Japan, UK, Italy
Double-sided auctions	Price discovery	H2Global
Tax credits	Production incentives	US (45V), Australia
Mandates/Quotas	Mandatory demand creation	EU RED, ReFuelEU
Competitive tenders	Project support	European Hydrogen Bank

4. Certification and Standards

ISO 19870:2026: GHG measurement standard for hydrogen production.

• EU: 3.4 kg CO₂-eq/kg H₂ threshold.

• India: Renewable ammonia 0.38 kg CO₂-eq/kg; methanol 0.44 kg CO₂-eq/kg.

• China: Electrolyser efficiency standard 4.2 kWh/Nm³ (stack-level).

IX. CHINA - THE GLOBAL HYDROGEN POWERHOUSE

1. Electrolyser Manufacturing Landscape

Exceptional Growth:

Metric	2023	2024	2025
Manufacturing Capacity	~20 GW/yr	~28 GW/yr	>35 GW/yr
Number of Manufacturers	~50	~120	~200
Confirmed Orders	~3 GW	~5 GW	4.7 GW

Industry Structure:

• 40% from heavy industrial equipment manufacturers.

• ~30% from renewable energy equipment providers.

• ~30% from independent electrolyser startups.

"Involution" Challenge:

• 2/3 of manufacturers received no orders in 2025.

• Top 10 companies captured ~70% of total orders.

• Prices driven below manufacturing costs: stack only  (2025).

2. International Expansion

• LONGi Hydrogen: First 5 MW system delivered to Europe.

• Sungrow Hydrogen: 160 MW for Oman ammonia project.

• GuofuHee: Manufacturing plant in Germany (April 2026).

• PERIC: OEM partnership with Metacon for European production.

3. Quality and Performance Improvement

New Performance Standards (2026):

• Stack power consumption: <4.2 kWh/Nm³ (~71% LHV efficiency).

• Adaptability to variable loads required.

Advanced Projects:

• 200 tpa photocatalytic plant: World's largest (Panzhihua, Sichuan).

• Songyuan Project: 1 GW ALK-PEM hybrid system.

• Dongfang Electric PEM: 500 Nm³/h, 4.2 kWh/Nm³ efficiency.

4. New Policy Drivers

2026 Stimulus Package:

Component	Details
New markets	Renewable ammonia, methanol, synthetic fuels
New applications	Industrial heating, hydrogen blending
Transport	Heavy-duty trucks, buses
Innovation	Rail, shipping, aviation, backup power
Targets	100,000 FCEVs; hydrogen price <25-15 CNY/kg

"Belt and Road" Hydrogen Projects:

• Kenya: 100 ktpa renewable ammonia (geothermal, USD 800 million).

• Egypt: MoU for 175 ktpa renewable ammonia.

• Ethiopia: USD 14-15 billion integrated project.

X. AFRICA - POTENTIAL AND CHALLENGES

1. Demand Overview

2024:

• Hydrogen demand: 3.1 Mt (~3% global).

• Concentrated in 6 countries:

  • Egypt: ~50%

  • Algeria: 20%

  • Nigeria: 17%

  • South Africa: 5%

  • Libya: 5%

  • Equatorial Guinea: 3%

Current low-emissions production: Only 6 kt from small electrolysis projects.

2. Project Pipeline to 2030

• 31 announced projects, total capacity 1.2 Mt.

• Only 1 project has reached FID (<0.001 Mt).

• ~80% of projects are >1 GW scale.

• Over 80% of ammonia capacity targeted for exports.

3. Resource Potential

Renewable Energy:

• Technical potential: >1,000 TW.

• Potential hydrogen production: >45,000 Mtpa.

• Algeria holds 14% of regional potential.

Natural Gas:

• Reserves: 7% global, concentrated in Nigeria, Algeria, Egypt, Libya.

• Reserve-to-production ratios: Nigeria >100 years; Libya >100 years.

4. Fertilizer Sector

Current Status:

• Ammonia production: 10 Mt (6% global), requiring 2 Mt hydrogen.

• Fertilizer use: only 1/6 of global average.

• 48/54 countries fully reliant on fertilizer imports.

African Union Targets (2034):

• Triple fertilizer use from 2020 levels.

• Additional ammonia demand: >8 Mt (equivalent to 1.5 Mt hydrogen).

Middle East Import Dependency:

• Sub-Saharan Africa: ~35% of imports.

• Sudan: up to ~80%.

5. Steel Sector

2024 Production:

• Iron ore: 89 Mt (concentrated in South Africa, Mauritania, Liberia).

• DRI: >80% of iron production (global average ~10%).

• Steel: <30 Mt (~1.5% global).

Growth Potential:

• Iron ore production could more than double by 2030 (Simandou project, Guinea).

• Integration potential with manganese, chromium, renewables.

6. Recommendations for Africa

Area	Recommendations
Finance	Reduce cost of capital, use guarantees and insurance
Demand	Balance export vs. domestic use (fertilizers, steel)
Infrastructure	Long-term planning for pipelines and ports
Social benefits	Ensure projects contribute to electricity/water access
Renewables	Accelerate deployment for spillover effects
Certification	Develop hydrogen certification schemes

XI. IEA POLICY RECOMMENDATIONS

1. Review 2030 Targets

• Adjust targets to reflect market realities.

• Develop post-2030 long-term ambitions.

• Integrate hydrogen into energy security plans.

2. Accelerate Demand Creation

• Combine support schemes with mandates/quotas.

• Public procurement of low-emissions products.

• Focus on existing hydrogen applications.

3. Maintain Production Support

• Target "shovel-ready" projects.

• Provide stable, long-term funding visibility.

• Learn from first-wave policy experiences.

4. Expedite Infrastructure Deployment

• Streamline permitting processes.

• Improve coordination among authorities.

• Focus on industrial and port clusters.

5. Support Emerging Economies

• Partner to encourage domestic use cases.

• Enable export opportunities.

• Enhance food and energy security.

XII. IMPLICATIONS FOR VIETNAM

1. Lessons from China

• Scale and cost: Experience in large-scale electrolyser manufacturing.

• Policy integration: Combine production targets with demand creation.

• Financial support: Subsidy programs and tax incentives.

• Technical standards: Establish performance benchmarks early.

2. Supply Chain Opportunities

• Participate in global hydrogen value chains.

• Partner with China and other manufacturers.

• Leverage strategic location on shipping routes.

• Develop hydrogen hubs at strategic ports (Cai Mep, Da Nang, Hai Phong).

3. Strategic Roadmap for Vietnam

Phase	Actions
Short-term	Assess potential, issue National Hydrogen Strategy
Medium-term	Pilot green hydrogen production, develop infrastructure
Long-term	Build export hubs and industrial applications
Policy	Investment incentives, standardization, international cooperation

CONCLUSION

The Global Hydrogen Review 2026 reveals that the global hydrogen sector is at a critical inflection point:

1. Positive growth: Low-emissions hydrogen production grew 20% in 2025 and is set to accelerate.

2. China as central player: Leading in production, consumption, technology, and policy.

3. Significant barriers remain: Cost gap, demand uncertainty, policy delays.

4. Energy security driver: Hydrogen increasingly viewed as diversification tool, especially post-Middle East crisis.

5. Opportunity for emerging economies: Can leverage resources and participate in value chains.

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Reference: International Energy Agency (2026), Global Hydrogen Review 2026, IEA, Paris.

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Analysis based on official IEA report. Data updated to May 2026.