Global Hydrogen Review 2025 - IEA

The Global Hydrogen Review 2025 from the International Energy Agency (IEA) paints a complex but forward-looking picture of hydrogen’s role in the global energy transition. While momentum has slowed due to project delays, high costs, and regulatory uncertainty, the review makes clear that hydrogen remains central to decarbonisation strategies worldwide. For Oman and the wider Middle East, the lessons are timely—reinforcing the importance of policy clarity, infrastructure readiness, and scaling renewable resources to position hydrogen as a competitive pillar in the energy mix.

In 2024, global hydrogen demand climbed to nearly 100 million tonnes, up 2% from the previous year, but largely concentrated in traditional sectors such as refining and chemicals.

Low-emissions hydrogen—produced through electrolysis or fossil fuels with carbon capture—remains below 1% of total supply, though it grew by 10% in 2024 and is on track to cross 1 Mt in 2025.

However, the optimism of earlier years has been tempered. Potential production by 2030 now stands at 37 Mt per year, down from 49 Mt projected in 2024, reflecting cancellations and slower investment decisions.

Despite this recalibration, committed projects are set to deliver a fivefold increase in low-emissions hydrogen by 2030, rising to about 4% of global hydrogen supply.

The key bottleneck remains economics. Low-emissions hydrogen remains more expensive than unabated fossil-based production, especially after natural gas prices stabilised while electrolyser costs rose due to inflation and slower-than-expected deployment

Yet, the cost gap is expected to narrow by 2030, with China achieving cost competitiveness through scale and other regions benefiting from renewable abundance and CO₂ pricing mechanisms.

Infrastructure and Innovation

Hydrogen infrastructure is slowly taking shape. Nearly 80 major ports worldwide are now positioned to handle hydrogen-based fuels, creating the backbone for future maritime bunkering

On the technology front, innovation is accelerating. Electrolyser manufacturing capacity has grown nearly sixfold since 2021, though oversupply in China raises risks of consolidation
. Meanwhile, first-of-a-kind industrial pilots—from hydrogen-based steelmaking to maritime fuel applications—are moving closer to commercial scale

Southeast Asia in Focus: A Parallel for Oman

The review highlights Southeast Asia as an emerging hydrogen hub, with demand of 4 Mt per year in 2024, mostly from ammonia and methanol production

While 80% of this demand is still fossil-based, the region holds vast renewable potential. Indonesia alone could unlock over 90% of low-cost hydrogen (<$5.5/kg) potential by 2030 through solar-driven production
.

For Oman, the parallels are striking. Like Southeast Asia, Oman’s competitive advantage lies in abundant solar and wind resources, a strategic maritime location, and established industrial demand from refining, petrochemicals, and fertilisers. By targeting these existing applications first—just as the IEA recommends—Oman can accelerate adoption while building credibility as a low-emissions hydrogen exporter.

Policy Lessons for Oman

The IEA’s recommendations offer a roadmap that resonates with Oman Vision 2040 and Net Zero 2050 ambitions:

• Support shovel-ready projects in fertilisers, refining, and maritime fuel to bridge the cost gap and scale production

• Create demand through regulation and incentives, ensuring offtake in domestic industry while positioning Oman as a reliable export partner.

• Leverage port and industrial clusters like Duqm and Sohar, co-locating hydrogen production with immediate users to reduce risk.

• Facilitate project financing by strengthening public-private risk-sharing mechanisms, ensuring bankability of early projects.

• Collaborate with emerging economies to move up the value chain, securing Oman’s role not just as a producer but also as a technology and logistics hub.

Oman Sustainability Week: Showcasing Leadership

At Oman Sustainability Week 2025, hydrogen will once again dominate the conversation—underscoring its dual role as a domestic enabler of energy transition and an export opportunity linking Oman to global decarbonisation. The IEA’s analysis confirms that while challenges persist, momentum is far from lost. Instead, this is a period of recalibration, where policy alignment, infrastructure build-out, and strategic partnerships will define the winners of the hydrogen race.

For Oman, the message is clear: build on natural advantages, focus on early-stage adoption in established sectors, and ensure that regulatory and financial frameworks evolve quickly enough to capture global market share. Hydrogen may be at a turning point globally, but with bold action, Oman can ensure it becomes a cornerstone of its sustainable future.

Source: Global Hydrogen Review 2025