The renewable hydrogen market is expected to maintain steady growth thanks to subsidies from several developed countries.
According to SunHydrogen, hydrogen is establishing itself as key to the global energy transition. It offers solutions where fossil fuels fall short, both in terms of cost and environmental impact. Furthermore, Deloitte projects that the renewable hydrogen market could reach $1.4 trillion annually by 2050, driven by growing demand for decarbonization across all sectors.
Renewable hydrogen market
Hydrogen is the most abundant element in the universe. When used as a fuel in transportation and industry, its only byproduct is pure water. In contrast, hydrocarbons such as oil, coal, and natural gas generate CO₂ and other pollutants.
The hydrogen market is growing rapidly. Policy incentives, emerging technologies, and increased industrial adoption are accelerating its expansion. According to the International Energy Agency (IEA), last year saw a doubling of low-emission hydrogen projects that reached final investment decision, although many are still in the early stages.
In the United States, the Inflation Reduction Act (IRA) established the Clean Hydrogen Production Tax Credit. The final Treasury/IRS regulations, issued on January 3, 2025, confirm a phased credit per kilogram of up to $3/kg, based on a life cycle carbon intensity of ≤4 kg of CO₂e/kg of H₂, available for 10 years from the date of commissioning of the facility; credits are transferable and can be used as direct payment for the first five years.
Subsequent legislation, enacted in July 2025, set January 1, 2028, as the deadline for the start of construction. Together, these changes seek to provide greater investment security for developers.
Europe
In the European Union, the REPowerEU plan sets targets of 10 million tons of locally produced renewable hydrogen and another 10 million tons imported by 2030. These targets are supported by key infrastructure, such as trunk pipelines and import corridors.
In Japan, the Basic Hydrogen Strategy revised in June 2023 sets a target of 12 million tons per year by 2040, including ammonia, and maintains a target of 20 million by 2050. The plan is backed by multi-year public-private investment commitments.
Australia, Saudi Arabia, and the United Arab Emirates are seeking to establish themselves as major producers and exporters. Australia updated its National Hydrogen Strategy in 2024 to guide production, use, and export. Saudi Arabia is moving forward with the NEOM project, and the UAE is promoting its National Hydrogen Strategy 2050, both with ambitions for large-scale export and infrastructure development.