Green hydrogen industry faces gap between capacity and demand

The global green hydrogen industry faces a significant gap between production capacity and market demand. According to a report by the Energy Industries Council (EIC), while Europe possesses sufficient industrial capacity for electrolyzers, investment remains stagnant. Of the 31 gigawatts (GW) of electrolytic capacity planned for Europe by 2030, only 3 GW have reached a Final Investment Decision (FID).

In the Middle East and North Africa (MENA) region, abundant solar and wind resources are positioning the area as a major hub for renewable power and hydrogen production. These projects often utilize Chinese technology and engineering to target European markets. However, the industry faces challenges due to a shortage of committed buyers and inconsistent policy signals from the European Union.

The International Energy Agency (IEA) notes that currently, less than 1 percent of global hydrogen production is classified as low-emissions. While renewable capacity in the MENA region is predicted to triple to nearly 150 GW by 2030, the transition from fossil-fuel-dominated hydrogen to green alternatives remains hindered by high production costs and market uncertainty.