IEA Global Hydrogen Review 2025: Key Highlights
Summary for Shipping & Cost Perspectives
The International Energy Agency’s Global Hydrogen Review 2025 is one of the most comprehensive annual assessments of the hydrogen sector worldwide. While the report takes a broad view—covering everything from industrial applications to road transport and power generation—it remains highly relevant for those of us focused specifically on maritime decarbonisation. The sections on hydrogen-derived fuels for shipping, port infrastructure readiness, and bunkering economics provide valuable data that’s difficult to find elsewhere. Even the general cost projections and policy updates help contextualise where maritime hydrogen applications fit within the wider energy transition. Below, I’ve distilled the key takeaways most relevant to shipping and hydrogen economics.
The Big Picture
Global hydrogen demand reached almost 100 million tonnes in 2024, up 2% from 2023. Low-emissions hydrogen production grew 10% and is on track to reach 1 Mt in 2025, but still accounts for less than 1% of global production. Despite project delays and cancellations, the sector continues to mature with more than 200 low-emissions hydrogen projects having received final investment decisions since 2020.
Hydrogen for Shipping: Key Takeaways
Fleet Growth and Momentum
- 60+ methanol-powered ships are now on the water as of June 2025
- ~300 additional methanol-powered ships are on order books
- Ships expected for delivery in 2028: only one-third will have conventional oil engines; methanol-powered ships represent ~10% of gross tonnage
- 30+ ammonia-powered ships are on order, with deliveries starting late 2025
IMO Net-Zero Framework (Potential Game-Changer)
Approved in April 2025, the framework introduces fuel emission intensity standards and a GHG pricing mechanism. Note: Final adoption is expected around October 2026, with enforcement beginning Q1 2028—though these timelines remain subject to ongoing negotiations and are not yet finalised.
- Fuel emission intensity standards with two trajectories (base target and direct compliance target)
- GHG pricing mechanism:
- Tier 2 pricing: USD 380/t CO₂-eq for fuels above base target
- Tier 1 pricing: USD 100/t CO₂-eq for fuels above direct compliance target
- Zero or near-zero rewards for fuels below 19 g CO₂-eq/MJ
Bunkering Infrastructure at Ports
- Marine fuel bunkering is highly concentrated: Singapore alone supplies ~20% of global demand; just 17 ports cover >60% of sector refuelling needs
- Nearly 80 ports have well-developed chemical handling expertise (Chemical-handling Infrastructure Score >5), indicating readiness for hydrogen-based fuels
- 55 ports combine both high infrastructure readiness AND significant nearby hydrogen supply (>100 ktpa within 500 km)
- Key early-mover ports: Rotterdam, Singapore, Ain Sokhna (Egypt), Middle East ports, US East Coast
Technology Status
| Technology | Status |
|---|---|
| Methanol engines | Commercially available (dual-fuel) |
| 4-stroke ammonia engines | Commercially available (smaller vessels) |
| 2-stroke ammonia engines | Pre-commercial (large ocean vessels) |
| Hydrogen fuel cell vessels | First-of-a-kind commercial stage |
| Hydrogen ICE vessels | Demonstration stage |
Shipping Offtake & Supply Concerns
- Shipping accounts for significant share of firm offtake agreements for low-emissions hydrogen
- Major shipping companies (Maersk, CMA CGM, COSCO) increasing methanol orders
- Supply concerns emerging: Maersk scaling back methanol orders as hedging strategy against fuel supply uncertainty
Hydrogen Production Costs: Key Data
Current Cost Ranges (2024)
| Production Route | Cost Range (USD/kg H₂) |
|---|---|
| Natural gas (unabated) | $0.8 – $4.6 |
| Natural gas with CCUS | ~$2+ (gas regions) |
| Coal (unabated) | ~$1.5 (China) |
| Renewable hydrogen (global) | $4 – $10+ |
| Renewable hydrogen (China) | ~$4 (low end) |
Cost Gap Reality
The drop in natural gas prices since 2022-23 and the increase in electrolyser costs due to inflation have widened the cost gap between low-emissions and fossil-based hydrogen. Support schemes remain essential.
Regional Cost Leaders (2030 Projected – Stated Policies Scenario)
| Region | Projected Renewable H₂ Cost |
|---|---|
| China | ~$2/kg (could be cost-competitive) |
| Middle East | $2-4/kg |
| Australia | $3-4/kg |
| United States | $3-4/kg |
| Europe | Higher, but gap narrowing due to CO₂ prices |
Electrolyser Costs
Electrolysers made outside China (2024):
- Capital cost: $2,000 – $2,600/kW
Electrolysers made in China (2024):
- Capital cost in China: $600 – $1,200/kW
- Installed outside China: $1,500 – $2,450/kW (after transport, tariffs, adaptation)
Key insight: Using Chinese electrolysers in Europe reduces hydrogen production cost by only 3-13% due to lower efficiency, compliance requirements, and local EPC costs.
Cost Reduction Outlook
- Electrolyser costs could fall 30-50% by 2030 depending on deployment levels
- In China, renewable hydrogen could become cost-competitive with fossil-based hydrogen by 2030
- In other regions, CO₂ prices of $100-270/t CO₂ would be needed to close the gap
Hydrogen-Based Marine Fuel Costs
Hydrogen Price at Pump (March 2025)
| Region | Price (USD/kg H₂) |
|---|---|
| China | $6.3 |
| Germany | $14.6 |
| California | $34.3 |
Price Targets for Competitiveness
- For fuel cell trucks to reach TCO parity with battery electric: ~$2.8/kg H₂ needed
- Ammonia from electrolytic H₂: Can meet IMO “zero or near-zero” threshold depending on electricity source
Key Trade Infrastructure Projects
- H2Global tenders: EUR 3 billion allocated for hydrogen/ammonia/methanol imports to Germany
- Fertiglobe-H2Global contract: 397 kt ammonia over 6 years at EUR 1,000/t (fixed price)
- Japan CfD auction: $20 billion for 15-year hydrogen import contracts
- Korea CHPS scheme: 15-year CfDs for hydrogen-fired power (enables imports)
Timeline Outlook
| Milestone | Timeframe |
|---|---|
| IMO Net-Zero Framework adoption | October 2026 (TBD) |
| Framework enforcement begins | Q1 2028 (TBD) |
| Major ammonia-powered vessel deliveries | Late 2025+ |
| 4x increase in low-emissions H₂ production | By 2030 |
| Cost-competitive renewable H₂ (China) | ~2030 |
| EU RFNBO mandate (shipping) | 1.2% by 2030 |
Key Recommendations from IEA
- Maintain support schemes for low-emissions hydrogen production
- Accelerate demand creation through regulations in shipping and other sectors
- Expedite infrastructure deployment at ports and industrial clusters
- Enhance public finance to reduce technology risks for first-of-a-kind projects
- Support emerging economies in developing hydrogen value chains