- Disruptions in the Middle East have triggered shortages and price volatility across global fertiliser, chemicals and refined products markets.
- Global hydrogen demand exceeded 100 million tonnes in 2025, while low emissions hydrogen production grew 20% to almost 1 million tonnes.
- Africa holds significant long term potential for low emissions hydrogen, but none of its announced projects targeting 2030 operation have yet reached a final investment decision.
The ongoing conflict in the Middle East has exposed critical vulnerabilities in global hydrogen based supply chains, disrupting the production and trade of key products used in fertiliser manufacturing, refining and chemicals production.
According to the latest Global Hydrogen Review from the International Energy Agency (IEA), the crisis has renewed interest in hydrogen and hydrogen based fuels as tools to strengthen long term energy security. However, low emissions hydrogen remains far from the scale required to offset current market disruptions.
Global hydrogen demand surpassed 100 million tonnes in 2025, while production of low emissions hydrogen increased by 20% to nearly 1 million tonnes. Despite this growth, high production costs, uncertain demand, regulatory complexity and inadequate infrastructure continue to slow deployment, placing many government targets for 2030 at risk.
“The current crisis has highlighted how deeply economies around the world depend on trade in hydrogen based products, from fertilisers to fuels and industrial feedstocks, and the significant role of the Middle East in those supply chains,” said IEA Executive Director Fatih Birol.
The Middle East accounts for approximately one sixth of global hydrogen production and is a major exporter of ammonia, urea, methanol and refined petroleum products. Disruptions to production facilities, export flows and shipping routes have tightened global supply, contributing to significant price increases.
Fertiliser markets have been among the hardest hit. The report notes that urea prices doubled between January and May 2026 as supply disruptions, higher natural gas prices and export restrictions pushed markets higher. Rising fertiliser costs are expected to place additional pressure on food supply chains, particularly in countries that rely heavily on imports.
While low emissions hydrogen production is expected to reach a record level in 2026 and exceed 1% of global hydrogen output for the first time, the sector continues to face substantial challenges.
Investment momentum weakened during 2025 as project developers delayed investment decisions and scaled back plans. The pipeline of announced low emissions hydrogen projects expected by 2030 has fallen by around 25% compared with last year, declining to 27 million tonnes as projects were postponed or cancelled.
Projects that have secured final investment decisions, or have a strong likelihood of becoming operational by 2030, now account for just over 6 million tonnes, down from 10 million tonnes in the previous assessment.
The report identifies weak demand as one of the sector’s biggest obstacles. Volumes covered by new offtake agreements remained largely unchanged in 2025, with only around 20% supported by firm contractual commitments. Developers continue to cite a lack of demand certainty as a major barrier to investment.
China remains the dominant player in electrolyser deployment, accounting for around 75% of new installations in 2025 as global installed capacity doubled to 4 GW. However, investment decisions for new electrolysis-based hydrogen projects declined for the first time, signalling a potential slowdown. New policy measures introduced in late 2025 are expected to support renewed growth.
Europe continues to progress through support programmes and regulatory requirements, particularly within the refining sector. However, slow implementation of key regulations remains a constraint on investment and project execution. Progress is also being recorded in North America, India and Japan, although policy uncertainty and concerns over future demand continue to affect project development.
Author: Bryan Groenendaal
