Hydrogen Industry Trends and Projections for 2025

Global Energy Landscape and Hydrogen’s Role

The global energy sector is undergoing a transformative shift. In 2025, renewable energy is expected to surpass coal as the largest source of electricity generation, with nearly 3,700 GW of new capacity projected. Hydrogen is emerging as a critical element in the clean energy transition, supported by technological advancements, economic growth, and evolving regulatory frameworks.

President Trump and the United States

The new US President and his views on energy could have repercussions beyond the US – as the old expression goes, ‘when America sneezes the world catches a cold’.  Setting out the US withdrawal from the Paris Agreement on climate sends out an obvious message.  The US will join a select club with only three other countries who are not party to the agreement – Iran, Libya and Yemen.  Unlikely bedfellows indeed but if the US leaves will others?

Domestically President Trump has issued an executive order pausing federal spending on key programs under the Inflation Reduction Act (IRA), citing concerns over national security and economic stability. The move is part of a broader declaration of a “national energy emergency,” which he says aims to protect American energy interests and reduce reliance on foreign countries.

Trump’s new “America First Energy Policy” emphasizes ramping up domestic fossil fuel production, reviving coal plants, and scaling back support for renewable energy projects. The executive order halts tax incentives, grants, and loan guarantees for solar, wind, and battery storage initiatives funded by the IRA until further review. Trump criticized renewable energy for allegedly endangering grid reliability and increasing costs for consumers.

The policy shift marks a sharp departure from the Biden administration’s climate and energy goals, which heavily invested in clean energy infrastructure to combat climate change and promote energy independence. Trump’s plan instead focuses on boosting oil, gas, and coal industries, with promises of job creation and lower energy prices.

How easy it is to roll back longer-term funding is yet to be seen.  President Trump will also no doubt consider that many renewable projects are in Republican States and are significant employers of his voter base. 

Major Developments in Hydrogen and Ammonia Sectors

The hydrogen industry is experiencing key developments:

1. Blue Hydrogen Growth in the U.S.
   Over 1.5 million tonnes per annum (Mtpa) of blue hydrogen capacity is projected to reach financial investment decisions (FID) in 2025, bolstered by the 45Q tax credit for carbon capture and storage (CCS). However, green hydrogen faces challenges, including higher production costs and limited policy support.
2. Giga-Scale Green Hydrogen Projects:
   At least one large-scale green hydrogen project (≥1 GW) is expected to reach FID. Regions such as Latin America, the Middle East, and China are leading due to low-cost renewable energy and government incentives.
3. Chinese Electrolyzer Market Expansion:
   Chinese manufacturers are predicted to secure over one-third of global electrolyzer orders outside Europe and North America. Geopolitical and trade restrictions, however, limit their entry into Western markets.
4. Uncontracted Hydrogen Production:
   Around 2.5 Mtpa of low-carbon hydrogen production remains without offtake agreements, primarily in the U.S. and China. Mechanisms like the Carbon Border Adjustment Mechanism (CBAM) are helping bridge cost gaps in countries like Japan and South Korea.
5. Rising Investments in Low-Carbon Ammonia:
   Investment in low-carbon ammonia is expected to double to $8 billion by 2025. This growth is fuelled by its role in decarbonizing maritime and aviation sectors, with Japan playing a significant market role.

Economic and Political Dynamics

While uncertainties persist, the hydrogen sector remains optimistic. Political changes, including the U.S. presidential change, could influence hydrogen policies. However, the integration of hydrogen with oil and gas sectors is likely to sustain tax incentives and support mechanisms.

The International Energy Agency (IEA) reported 97 Mtpa of hydrogen production in 2024, primarily driven by transport demand. Challenges such as economic volatility, high production costs, and fragmented policies remain hurdles to wider adoption.

Technological and Market Challenges

Several barriers must be addressed to achieve broader hydrogen adoption:

• Technological Limitations:
  Hydrogen’s low energy density and volatile nature complicate storage, transportation, and scaling.
• High Production Costs:
  Green hydrogen, produced via electrolysis, is significantly more expensive than grey or blue hydrogen due to the cost of electrolyzers and energy inputs.
• Inconsistent Regulations:
  The lack of harmonized global regulations creates investment uncertainties.
• Market Competition:
  Hydrogen faces competition from electric vehicles and alternative fuels, particularly in light transportation.

Future Projections for 2025 and Beyond

Despite these challenges, hydrogen’s potential remains strong, with advancements and favourable trends shaping its future:

1. Technological Progress:
   Innovations in electrolyzers and storage solutions, such as liquid organic hydrogen carriers, are expected to enhance efficiency and affordability.
2. Market Growth:
   Adoption in industrial and transportation sectors is expected to expand, with Europe and parts of Asia leading due to robust green initiatives.
3. Regulatory Support:
   Carbon emission targets are likely to drive supportive policies, tax incentives, and infrastructure investments for hydrogen.
4. Cost Reductions:
   While green hydrogen costs will decrease, they are expected to remain relatively high through 2040. Cost parity with grey hydrogen may be achieved in regions like China and India, accelerating adoption.

Integration into Broader Energy Systems

Hydrogen’s role in the global energy ecosystem intersects with trends in AI, electric vehicles, and geopolitics. Growing electricity demand, driven by data centers and AI applications, underscores the need for clean energy sources like hydrogen.

Conclusion

Hydrogen represents a transformative opportunity in the global shift toward sustainable energy. Overcoming economic, technological, and regulatory barriers will be crucial for its success. Collaboration across industries, governments, and other stakeholders, combined with innovation and strong policy support, will pave the way for hydrogen to become a cornerstone of a decarbonized global economy.

Finding the Talent

Europe’s recruitment landscape reflects the region’s need for a highly skilled workforce. Roles in project management, renewable energy engineering, and hydrogen production technology are expected to dominate. Furthermore, the demand for professionals with expertise in policy implementation, permitting processes, and cross-border collaboration will grow as the EU harmonizes regulations across member states. 

In the United States, recruitment efforts will need to target a broader range of expertise, from carbon capture and storage (CCS) specialists to logistics and distribution experts. With the region’s vast geography and diverse industrial sectors, the workforce must manage large-scale projects and navigate complex regulatory landscapes. 

Who Is Gibson Watts? 

At Gibson Watts, we specialize in connecting top-tier talent with groundbreaking opportunities in the hydrogen and renewable energy sectors. Our expertise lies in identifying the skills and experience required to drive the energy transition forward. From engineering and project management to policy and innovation, we partner with organizations across Europe, America, and Asia to build the workforce of the future. 

Three examples of our recent successes include: 

• International Hydrogen EPC: Placed senior engineers (Head of) and project managers to oversee large scale PtX projects.

• American Clean Hydrogen Startup: Recruited key executives for a fast-growing U.S. company specializing in hydrogen fuel cell technology. 

• European Engineering OEM building out a PtX capability: Supported a leading engineering manufacturer finding multiple senior hires to help build out a new PtX division

With a global perspective and a tailored approach, Gibson Watts is committed to empowering both companies and professionals to lead the way in a cleaner, more sustainable world.