Global Hydrogen Review 2024

Investment, finance and innovation

Highlights

  • In 2023, USD 3.5 billion was spent globally by project developers on hydrogen supply projects that are under construction. Around 80% of this was for projects building electrolysis facilities and the rest on projects coupling hydrogen production with carbon capture, utilisation and storage (CCUS). For electrolysers, this was an increase of over 350% compared with 2022, mostly for the industrial and refining sectors. Spending on infrastructure projects – pipelines, storage and refuelling – remains at a much lower level.
  • Half of the spending on electrolysis projects was in China in 2023 and one-third in Europe. China leads on annual investment due to the large numbers and sizes of projects, which offset lower unit costs than in other countries. If all Chinese projects that have achieved a final investment decision (FID) are delivered to plan, spending there would rise 140% in 2024. Spending on CCUS-equipped hydrogen projects was highest in North America.
  • Investment spending on electrolysis projects could rise by as much as 150% in 2024, based on recent FIDs. Spending on CCUS-equipped plants will also increase in the coming years. Four projects representing around 1 Mtpa in total for hydrogen production with CO2 capture and storage took FID since last year’s report, including new facilities and retrofits of existing plants. For both production routes, the largest projects are reaching industrial scales and this trend, coupled with recent cost inflation, is driving up investment, despite some project delays. However, annual investment of USD 50 billion is needed this decade to get on track with the Net Zero Emissions by 2050 Scenario (NZE Scenario).
  • While hydrogen company valuations have struggled recently on public markets, hydrogen start-ups successfully increased the total equity funding they raised to USD 3.7 billion in 2023. Project developers for industrial hydrogen uses and technology developers for hydrogen production dominated this total, but deals so far in 2024 show more technology variety.
  • Several innovation milestones have been achieved in the past year, and anion exchange membrane (AEM) electrolysis and catalytic decomposition of methane to make hydrogen both moved up to Technology Readiness Level (TRL) 7. Promising tests of ammonia combustion in boat engines and power plants have also been reported.
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