Hydrogen Hits $110B: The Shift Nobody Saw Coming

The clean hydrogen sector just crossed a milestone that few saw coming this fast. More than 500 projects worldwide have now moved past the talking stage and into real investment territory, backed by $110 billion in committed capital. That's a $35 billion jump in just one year, and it signals something bigger than hype.

According to the Hydrogen Council's inaugural Global Hydrogen Compass report, developed with McKinsey & Company, the industry has been growing at a 50% year-over-year rate since 2020. What makes this moment different is that capital is moving into projects that are either under construction or already operational, not just announced with fanfare and forgotten.

The numbers tell a story of an industry shaking off early-stage chaos and entering a phase where the strongest business cases survive, and weaker ones quietly drop out. This is what maturation looks like, and North America is playing a central role in how it unfolds.

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North America Leads In Low-Carbon Production

While China leads globally in total committed investment at $33 billion, North America holds a different advantage. The region has committed $23 billion in hydrogen projects and produces 85% of the world's low-carbon hydrogen. That production dominance matters more than total capital when it comes to the transition away from grey hydrogen.

The U.S. has been aggressive in building out hydrogen infrastructure through initiatives like the Regional Clean Hydrogen Hubs program, which allocated $7 billion to develop networks of producers, consumers, and connective infrastructure. Projects like the Mid-Atlantic Clean Hydrogen Hub and the Appalachian Regional Clean Hydrogen Hub are laying groundwork that will support industries from heavy manufacturing to transportation.

Europe ranks third in committed investment with $19 billion, but it accounts for nearly two-thirds of expected global clean hydrogen demand by 2030. That's driven by aggressive policy frameworks including the Carbon Border Adjustment Mechanism and Renewable Energy Directive III, which sets volume targets for hydrogen and other non-biological renewable fuels.

Industry Maturation: Survival Of The Fittest

Since 2020, more than 1,700 hydrogen projects have been announced worldwide. But announcements don't mean much if they don't move forward, and that's where the natural selection process comes in. About 50 projects have been publicly cancelled in the past 18 months, most of them early-stage renewable hydrogen ventures that couldn't secure financing or regulatory support.

That 3% cancellation rate might sound low, but it represents something important. The projects getting built are the ones with solid business cases, regulatory backing, and locked-in offtake agreements. The ones that were purely speculative or riding the hype wave are being quietly withdrawn.

This cleanup phase mirrors what happened in solar, wind, and battery industries as they matured. Projects with the strongest economics advance, close financing, and move into construction. The rest fall away, and that's healthy for long-term industry credibility.

The Hydrogen Council's survey of CEOs found that 74% report stable or increased investment appetite over the last two years, despite a challenging environment. Even more telling, 97% of surveyed CEOs believe hydrogen will be critical for decarbonizing hard-to-abate sectors, and 83% expect continued industry growth.

What's Driving Projects Forward

Several factors are separating the projects that reach final investment decision from those that stall out:

1. Secured offtake agreements. Projects with binding contracts for hydrogen delivery have a clear path to revenue. Without demand certainty, financing becomes nearly impossible.

2. Policy stability and support. Regions with clear regulatory frameworks and tax incentives, like the U.S. 45V hydrogen production tax credit, are seeing faster project development.

3. Access to low-cost renewable energy. Projects that can secure long-term power purchase agreements for wind or solar are achieving better economics and attracting more investment.

The Supply-Demand Challenge

Here's where things get interesting. Total committed capacity now exceeds 6 million tonnes per year, with 1 million tonnes already operational. But globally, only 3.6 million tonnes per year of binding offtake has been secured. That's a gap, and it's the next big challenge the industry needs to solve.

The current project pipeline could support up to 9.14 million tonnes of clean hydrogen capacity by 2030, but that assumes delays get resolved and expected attrition is factored in. More importantly, it requires demand to materialize, and unlocking that demand is where policy becomes critical.

Region	Committed Investment	Key Advantage
China	$33 billion	Over 50% of global renewable capacity
North America	$23 billion	85% of global low-carbon production
Europe	$19 billion	Two-thirds of 2030 global demand

Key markets like the EU, U.S., Japan, and South Korea have secured policy certainty that could drive up to 8 million tonnes of clean hydrogen demand by 2030. But policy alone won't close the gap. Industry needs binding agreements, mandated uptake, and contracts for difference that give developers certainty before they commit capital. Applications like sustainable aviation fuel production and blue ammonia facilities are showing early promise in converting hydrogen into commercially viable products.

What Needs To Happen Next

The supply side is scaling faster than demand, which creates a chicken-and-egg problem. CEOs surveyed by the Hydrogen Council were optimistic that the existing supply pipeline could meet demand once it firms up, but they were clear that supply alone won't drive uptake.

Demand-side policy is the critical enabler. That means governments need to move beyond frameworks and commit to mechanisms that create real market pull. This includes:

• Volume mandates for industries like steel, cement, and chemicals to use clean hydrogen
• Contracts for difference that protect developers from price volatility during early deployment
• Cross-border infrastructure coordination for hydrogen transport and storage networks
• Harmonized standards that allow hydrogen to move across regions without regulatory friction

The U.S. has been making progress on this front through initiatives like the Regional Clean Hydrogen Hubs and the 45V tax credit, which provides up to $3 per kilogram for the cleanest hydrogen production. Complementary infrastructure like carbon capture and storage is also scaling rapidly, with over $77 billion invested across 270 projects nationwide. But timely implementation matters, and delays in finalizing regulations could slow momentum just as projects are ready to scale.

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What This Means For The Industry

The hydrogen sector is no longer in the aspirational phase. It's in the execution phase, where projects either deliver or don't, where capital either flows or dries up, and where policy either enables scale or creates bottlenecks.

North America's advantage in low-carbon production positions it well to capture value as global demand grows. The region's challenge is making sure that infrastructure gets built fast enough to connect supply with end users, and that policy support remains stable through political transitions. Projects like Texas's $5 billion blue ammonia investments show how hydrogen can be converted into transportable energy carriers for global markets.

The industry maturation happening right now, with natural project attrition and a focus on bankable business cases, is a sign of health. It means the hype cycle is giving way to pragmatism, and that's exactly what's needed to build something that lasts. The question now isn't whether hydrogen will play a role in decarbonization, it's how quickly the industry can close the supply-demand gap and move from hundreds of projects to thousands.