Global hydrogen investments have exceeded $130 billion across more than 570 projects, as energy security concerns provide fresh momentum to the sector in 2026.
Hydrogen investments rise above $130 billion as energy security concerns grow
Hydrogen investments continue to advance despite the challenges that have emerged after the sector’s rapid early expansion. Demand has proved weaker than initially expected, while costs have fallen more slowly than anticipated. Nevertheless, investment growth remains significant. With energy security back at the centre of attention 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, representing a combined production 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.
Global Hydrogen Compass 2026 highlights growing hydrogen investments
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 industry. One trend stands out: the conflict in the Middle East has injected a new sense of urgency into the sector. Energy and food system security concerns could become two of the main drivers of future investment, potentially outweighing decarbonisation alone.
“Operational capacity has nearly doubled over the past 12 months, and CEOs around the world remain focused on project delivery, with 70% of those surveyed for this report indicating that their investment appetite has remained stable or increased,” the Council writes.
The figures, however, need to 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.
Who is leading hydrogen investments?
As in many other technology segments of the energy transition, China has established a clear lead in hydrogen. Beijing ranks first globally for committed investment, at $44.5 billion, and for committed production capacity, with 1.9 Mtpa from large-scale projects.
Driven by a highly competitive market and economies of scale, China’s industry has brought the cost of alkaline electrolysers below $350/kW over the past five years and now accounts for 60% of the market. This has helped bring renewable hydrogen production costs to around $3.5/kg today, with the potential to reach $2/kg by 2030. China also has the world’s largest fleet of fuel-cell vehicles, with more than 32,000 vehicles in operation.
Europe is the world’s second-largest hydrogen investment market
Europe is the second-largest market for committed hydrogen investments, with 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 renewable fuels of non-biological origin (RFNBOs). Renewable hydrogen production costs in Europe remain between $5/kg and $9/kg.
North America dominates the low-carbon, or blue hydrogen, segment. The region accounts for around $26 billion in hydrogen investments, supporting a record 2.9 Mtpa of committed production capacity.
Middle East, Japan, South Korea and India expand investment
Next in the investment ranking is the Middle East, particularly Saudi Arabia, the United Arab Emirates and Oman, with $11 billion concentrated in just 15 gigawatt-scale megaprojects. Together, these projects represent around 500,000 tonnes of hydrogen production per year.
They are followed by Japan and South Korea, with $7 billion, and India, with $6 billion, largely directed towards H2 production for domestic renewable ammonia synthesis.
“The experience of leading markets also points to the sector’s next challenge,” write the Council’s co-chairs, Jaehoon Chang, Vice Chair of Hyundai Motor Group, and François Jackow, Chief Executive Officer 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 the 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.”
