Paris: The International Energy Agency (IEA) has forecasted an annual production of approximately 37 million tonnes of low-carbon fuel by the year 2030. This figure represents a decrease from the previous year's projection of 49 million tonnes, as developers are opting to halt or delay their plans.

According to Qatar News Agency, the IEA outlined in its Global Hydrogen Review report that the reduction in projected production is attributed to a series of cancellations, cost pressures, and uncertain policies. This has resulted in a nearly 25% cut in the anticipated development of low-emission hydrogen projects by the end of the decade.

The IEA emphasized that actual production could be lower than projected, as not all planned projects are expected to reach completion. Despite this, the agency noted that the capacity of operational, under-construction, or final investment decision-stage projects is predicted to increase significantly-more than fivefold from 2024 levels-to surpass 4 million tonnes annually by 2030.

Furthermore, the IEA suggested that an additional 6 million tonnes of production capacity could be achieved by 2030 if effective government policies are introduced to stimulate demand and expedite infrastructure development.

The report highlighted cost competitiveness as a primary barrier, noting that recent declines in natural gas prices have favored fossil fuel-based hydrogen, while increased electrolyzer prices have adversely affected low-carbon projects. Nevertheless, the IEA anticipates a narrowing of the cost gap by 2030, driven by declining technology costs, advancements in regions with robust renewable energy growth, and new regulatory adjustments in cost structures.