Global Hydrogen Compass 2026
Hydrogen investments continue to advance. After several highly dynamic early years, the sector has faced a series of challenges, starting with projected demand falling short of supply and cost reductions progressing more slowly than expected. Yet growth remains clear. With energy security concerns intensifying and a conflict directly affecting around one-sixth of global H2 production, total investment in hydrogen production projects that have reached final investment decision has now exceeded $130 billion.
The figure covers more than 570 projects, including facilities under construction or already operational, with a combined capacity of around 6.9 million tonnes per annum (Mtpa). Of this total, 3.7 Mtpa is low-carbon hydrogen produced from natural gas with carbon capture, while 3.2 Mtpa is renewable hydrogen generated through electrolysis.
The figures come from the Global Hydrogen Compass 2026, prepared by the Hydrogen Council in collaboration with McKinsey & Company to provide a detailed assessment of the sector. One point stands out: the conflict in the Middle East has injected a new sense of urgency into the market. Energy security and food system security concerns could become two of the main drivers of future investment, potentially outweighing decarbonisation alone.
“Operational capacity has nearly doubled in the past 12 months, and CEOs around the world remain focused on project delivery, with 70% of respondents to this report indicating that their investment appetite has remained stable or increased,” the Council writes.
The figures, however, should be treated with caution. Hydrogen has experienced periods of intense enthusiasm before, and the sector has yet to demonstrate that it can sustain long-term development, particularly on the demand side. The report itself estimates potential clean hydrogen demand of 11 Mtpa by 2030, but only 6 Mtpa is currently secured through dedicated policies or binding contracts.
Hydrogen investments: which markets are leading?
As in almost every technology segment of the energy transition, China has no rival in hydrogen. Beijing leads the global ranking for hydrogen investments, with $44.5 billion committed, as well as for committed production capacity, with 1.9 Mtpa across large-scale projects.
Thanks to a highly competitive market and economies of scale, China’s industry has cut the cost of alkaline electrolysers to below $350/kW over the past five years and now controls 60% of the market. This has helped bring renewable hydrogen production costs down to around $3.5/kg today, with the potential to reach $2/kg by 2030. China also operates the world’s largest fleet of fuel-cell vehicles, comprising more than 32,000 vehicles.
Europe ranks second for hydrogen investments
Europe is the second-largest market for committed hydrogen investments, at around $30 billion, but ranks first by total number of projects. Its 232 projects represent around 1 Mtpa of committed capacity, reflecting the smaller average scale of European facilities.
Europe is also the world’s leading demand centre for renewable hydrogen, or RFNBOs. Renewable hydrogen production costs in Europe remain between $5/kg and $9/kg.
North America leads the low-carbon hydrogen segment
North America dominates the low-carbon hydrogen, or blue hydrogen, segment. The region accounts for around $26 billion in hydrogen investments and a record 2.9 Mtpa of committed production capacity.
Middle East hydrogen investments reach $11 billion
The Middle East follows in the global investment ranking, led by Saudi Arabia, the United Arab Emirates and Oman. Together, the three countries account for $11 billion in hydrogen investments concentrated in just 15 gigawatt-scale megaprojects, representing a combined production capacity of around 500,000 tonnes per year.
Japan and South Korea follow with $7 billion, while India has committed $6 billion, mainly to H2 production for domestic renewable ammonia synthesis.
“The experience of leading markets also points to the sector’s next challenge,” write Hydrogen Council co-chairs Jaehoon Chang, Vice Chair of Hyundai Motor Group, and François Jackow, CEO of Air Liquide.
“Existing policies could unlock around 11 million tonnes per year of clean hydrogen demand by 2030. Around 6 million tonnes of this demand is already secured, thanks to policy measures that have been adopted and implemented. The remaining 5 million tonnes do not require a technological breakthrough, a new strategy or a new commitment. They are waiting for determined and consistent implementation of existing policy commitments, such as the full transposition of RED III targets and the implementation of robust carbon pricing mechanisms such as the ETS and CBAM in Europe. Every month of delay in implementing these measures represents a month of unrealised investment.”