Dii Editorial Q2 2026: Key Messages form IEA’s Global Hydrogen Review 2026 Report

By Fadi Maalouf, Chief Technology Officer, Dii Desert Energy 

The IEA’s Global Hydrogen Review 2026 Report is one of the most authoritative global references on the evolution of hydrogen markets, providing a comprehensive assessment of production, demand, policy, infrastructure, trade, investment, and innovation. As a flagship report, it offers governments, industry leaders, investors, and energy stakeholders a clear evidence base for understanding where the hydrogen economy stands today and what is required to scale low-emissions hydrogen in line with energy security, industrial competitiveness, and decarbonisation priorities. The 2026 edition is particularly important because it captures the sector at a critical moment: hydrogen demand continues to grow, but deployment of low-emissions supply, infrastructure, and firm offtake remains slower than needed, while geopolitical disruptions have exposed the strategic importance of resilient hydrogen and hydrogen-derivative supply chains.

The report is well structured in eight chapters with informative and appealing visualization charts. The report’s high level key messages are:

1. Global hydrogen demand exceeded 100 Mt in 2025, with over 95% consumed in traditional sectors such as refining, ammonia, methanol, and heavy industry; demand from new applications remains small but is growing.  
2. Low-emissions hydrogen production reached nearly 1 Mt in 2025, growing about 20% year-on-year, but still accounts for less than 1% of total hydrogen production globally.  
3. The Middle East conflict severely disrupted global hydrogen-related supply chains, affecting ammonia, urea, methanol, refining products, and fertilizers, exposing vulnerabilities in energy and food security systems.  
4. The Middle East produces roughly one-sixth of global hydrogen, accounts for more than 25% of ammonia trade, nearly 40% of urea trade, and about 45% of methanol trade, making the Strait of Hormuz a critical global chokepoint.  
5. Fertilizer markets experienced major price shocks, with urea prices doubling between January and May 2026 due to supply disruptions, higher natural gas prices, and export restrictions.  
6. Hydrogen can enhance long-term energy security by diversifying energy sources, reducing dependence on fossil fuel imports, improving supply resilience, and enabling large-scale energy storage, although benefits will take years to materialize.  
7. Global electrolyser capacity doubled in 2025 to exceed 4 GW, with China accounting for nearly three-quarters of new installations and maintaining a dominant position in manufacturing and deployment.  
8. The announced low-emissions hydrogen project pipeline has weakened, shrinking to about 27 Mtpa by 2030 due to project cancellations and delays; only around 6 Mtpa currently has a strong likelihood of operating by 2030.  
9. Demand creation remains the sector’s biggest challenge, with only about 1.7 Mt of new offtake agreements signed in 2025 and just 20% supported by firm contractual commitments.  
10. Most countries are not on track to meet their 2030 hydrogen targets; only China and the Netherlands currently appear likely to achieve their announced production ambitions.  
11. The competitiveness of low-emissions hydrogen depends less on a single global production cost and more on the maximum hydrogen price that different end-use sectors can absorb while remaining competitive with incumbent production routes. This cost acceptability varies significantly by sector and region.
12. The acceptable hydrogen cost is below USD 2/kg for most regions and applications, meaning that low-emissions hydrogen remains above what most users can afford on a parity basis. Refining and ammonia tend to show higher willingness to absorb hydrogen costs where energy prices are high, such as in Europe, while steel is particularly sensitive to carbon pricing because of its high emissions intensity and relatively low energy-cost share. Overall, cost acceptability reinforces the message that hydrogen scale-up will depend not only on lowering production costs, but also on creating bankable demand, targeted incentives, credible carbon policies, and premium markets for low-emissions products.
13. Policy support remains essential, as low-emissions hydrogen is generally more expensive than conventional hydrogen outside China; governments need stronger demand mandates, subsidies, procurement schemes, and infrastructure support.  
14. Africa could become a major future hydrogen hub, leveraging vast renewable resources to produce low-emissions hydrogen, ammonia, and green steel, but high financing costs, weak infrastructure, and limited project maturity remain significant barriers. Africa consumes about 3.1 Mt of hydrogen annually and produces only about 6 kt of low-emissions hydrogen.  

In conclusion, hydrogen remains important for decarbonisation, energy security, industrial competitiveness, and supply-chain resilience. Yet scale-up is lagging because of high costs, weak demand, infrastructure bottlenecks, and slow policy implementation. Progress now depends on lowering costs, creating bankable demand, and building infrastructure that connects supply with credible end-use markets.