Hydrogen is key to decarbonizing, and countries worldwide unequivocally recognize this, as seen from the widespread policies supporting hydrogen market development displayed in exhibit 1. Most European countries have developed hydrogen strategies and roadmaps, with targets for green H2 production capacity by 2030, including 5.0 GW in the UK, 10.0 GW in Germany, and 6.5 GW in France. The U.S. has its National Clean Hydrogen Strategy and Roadmap, targeting 10 million tons per annum of low-carbon H2 production by 2030. This initiative is supported by tax credits and grants. India has launched a National Green Hydrogen Mission backed by $2.3 billion in funding. Meanwhile, Australia is set to incentivize green hydrogen production with a program beginning in 2027.
Exhibit 1. Policies supporting production and use of hydrogen globally
Despite the strong policy support, the demand is yet to materialize. A significant percentage of hydrogen projects that have been announced, 79% in the Americas, 88% in Europe, the Middle East, and Africa, and 90% in Asia Pacific, do not have offtake agreements. The lack of immediate demand and infrastructure and poor profitability have led to setbacks in the hydrogen and low-carbon hydrogen value chain. Air Products recently withdrew from several green hydrogen projects. BP canceled an 80 MW green hydrogen project in the UK. Meanwhile, Plug Power’s stock price dropped dramatically from $65 in early 2021 to $1 by April 2025. Shell permanently closed light-duty hydrogen refueling stations in California, and Nikola filed for bankruptcy in early 2025. These setbacks have led many to question what comes next.
The broad industry consensus suggests a bleak outlook for the hydrogen market. Consequently, ADI has been engaged in research to understand where the demand for hydrogen, especially low-carbon hydrogen, truly lies. Therefore, stakeholders in the hydrogen value chain will have to strategically invest in attractive regions, applications, and technologies to gain an early move advantage. Some of the developments that ADI has seen in low-carbon hydrogen value chain as shown in exhibit 2.
Exhibit 2. Developments in low-carbon hydrogen value chain by region, application, and technology
As the exhibit above summarizes, applications where hydrogen offers a clear decarbonization pathway, such as fuel in heavy-duty transport or marine fuel, are likely to support growth in the near term. For instance, IMI recently delivered its 2MW electrolyzer to the H2iseO Hydrogen Valley project in Lamezia Terme, Italy. This initiative aims to decarbonize Italy’s public transport system. Low-carbon hydrogen could also find use in producing low-carbon ammonia or methanol, steel production, as well as data centers. ECL, a data center-as-a-service provider, plans to power its data center using hydrogen fuel cells. They’ll also use the produced water as a cooling technique.
However, there continues to be a lot of uncertainty in the market and its outlook. Stakeholders across the hydrogen value chain including investors, OEMs, technology developers, hydrogen producers, transportation providers, and end-users have several critical questions including:
- How severe will the downturn be and how long will it last?
- Where will low-carbon hydrogen demand truly materialize and how will it evolve regionally?
- What are the most cost-competitive production technologies, and what will the supply mix look like by 2050?
- What are the key hurdles preventing producers from securing offtake agreements?
- How will infrastructure for hydrogen production, transportation, and distribution evolve?
- How will costs and pricing evolve, and what role will policy play?
- How should hydrogen value chain participants adjust their strategies to prepare for the future?
ADI is launching a multi-client study titled “Navigating the Hydrogen Downturn.” This study aims to help stakeholders answer critical questions about the hydrogen market. It will also address the market’s growth outlook through 2050. The study offers comprehensive research, intelligence, and insights for investors, OEMs, technology developers, hydrogen producers, transportation providers, and end-users.
We welcome you to join this study. As a subscriber, you’ll have multiple options to customize your access to the study deliverables. These include a report of approximately 150 pages and a detailed data sheet. You’ll also get a workshop to share findings and discuss underlying assumptions. An annual subscription is available, offering four quarterly updates to the study. Download our study prospectus to learn more.
About ADI Analytics
ADI is a prestigious, boutique consulting firm specializing in oil and gas, energy transition, and chemicals since 2009. We bring deep expertise in a broad range of markets where we support Fortune 500, mid-sized and early-stage companies, and investors with consulting services, research reports, and data and analytics, with the goal of delivering actionable outcomes to help our clients achieve tangible results.
We also host the ADI Forum that brings c-suite executives together for meaningful dialogue and strategic insights across the oil & gas, energy transition, and chemicals value chains. Learn more about the ADI Forum.
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