Governments should bolster low carbon hydrogen production capacity as one way to increase both energy and food security, as investment in the fuel starts to flag over its relatively high cost, the International Energy Agency said on Thursday.
The Middle East conflict has disrupted global production of hydrogen-based products, the agency said in a summary of a new report, something which jeopardizes stability in the production of fertilizer, oil refining and chemicals production.
Although the crisis has also increased interest in hydrogen and hydrogen-based fuels as options to bolster energy security, low-emission hydrogen is not currently available at a scale that would make it a back-up in a period of crisis, the IEA said.
Global hydrogen demand exceeded 100 million tonnes in 2025, but low-emission hydrogen, despite 20% growth in a year, accounted for only 1 million tons of that volume.
Low-carbon hydrogen's high cost, uncertain demand, complex regulations and lack of infrastructure remain barriers to its development and will hamper the achievement of governmental 2030 emission targets for some countries as a result.
IEA Executive Director Fatih Birol said that the crisis, whose resolution is not yet certain pending confirmation of a reopened Strait of Hormuz waterway, underscores how dependent economies worldwide are on hydrogen-based products, for fertilizer, fuel and industrial feedstocks.
He said low-emission hydrogen can make energy flows more resilient and diversified but that its development will need to accelerate with much stronger policy support "before it can make a meaningful contribution at scale".
The Middle East accounts for about one sixth of global hydrogen production and it has a significant role in the trade in ammonia, urea, methanol and refined products, the report said.
Urea prices for one, doubled between January and May due to the Iran war, while natural gas prices rose and export restrictions limited availability. The knock-on increase in fertilizer costs is a risk for food production, particularly in import-dependent economies with a large farming sector.
While low-emission hydrogen production will climb to a new record in 2026, this will take it only above 1% of total hydrogen. Weaker investment momentum in hydrogen in 2025 will slow low-emission hydrogen's growth, the report notes.
The pipeline of projects for low-emissions hydrogen due by 2030 has actually shrunk by one quarter, due to project cancellations or delays, given its relatively higher cost versus more carbon-intensive sources of hydrogen.
The pipeline of projects likely to become operational by 2030 has decreased to just above 6 million tonnes, down from 10 million in an assessment last year.
There is also doubt in terms of demand, with only about 20% of newly-signed volumes backed by firm offtake agreements. Developers say this has given them pause for thought over new investments, the report said.
China still holds the leading position in electrolyser capacity development, claiming about 75% of the four gigawatts of new installations in 2025 globally.
Policy support is sustaining momentum in Europe to an extent, particularly in terms of hydrogen's use in refining but slow implementation of regulations is delaying investment.
There are also signs of growth emerging in North America, India and Japan but uncertainty remains over regulations, incentives and future demand.