DNV has downgraded its long-term clean hydrogen forecast compared to its 2022 outlook, but still expects the sector to attract $3.2 trillion in cumulative investment through 2060 as efforts focus on a narrower group of hard-to-abate sectors, including heavy industries.

It expects 2050 clean hydrogen deployment will be over 150 MtH2/y. This is 45% lower than DNV projected just four years ago, due to project delays/weak policy follow-through and advances in electrification across large parts of energy systems.

Up to 130 MtH2/y is expected to come from renewable electrolysis, with a further 40 MtH2/y from low-carbon hydrogen production routes such as gas reforming with CCS.

According to the report, over 1,500 hydrogen pilots and small-scale projects have been announced globally, but only around a third of these have reached final investment decision, with a relatively small number advancing to construction.

DNV still forecasts clean hydrogen volumes will increase 100-fold from current levels by 2060, driven largely by steelmaking, e-fuels for aviation and shipping, fertilisers, and methanol production – sectors where electrification remains difficult or uneconomic.

The forecast shows hydrogen becoming heavily concentrated in a handful of industrial sectors. By 2060, DNV said steelmaking and aviation are each expected to account for 18% of demand, followed by maritime at 15%. Fertilisers and methanol are projected to contribute 13% each.

The revised forecast suggest that hydrogen’s economy-wide role is unlikely to emerge, with electrification displacing hydrogen in applications like mobility and heating that were once viewed as demand centres.

“The hydrogen industry is poised for growth, but it is a fragile stance,” said DNV’s CEO of Energy Systems, Ditlev Engel. “It is time for policymakers to study carefully the practical progress that has been made and to act decisively.”

It also reinforced China’s growing dominance. DNV said China will account for 35% of growth in hydrogen production and demand through 2060, with clear ambitions to scale up clean hydrogen in its 15th Five-Year Plan.  This is supported by China’s large renewable energy base and dominant position in electrolyser manufacturing. According to the report, China already controls around 60% of global electrolyser manufacturing and is on track to supply three-quarters of cumulative electrolyser capacity additions through 2050.

The report stresses that clean hydrogen remains fundamentally policy-driven, due to high costs compared to fossil-based alternatives. It will continue to depend on subsidies, mandates, contracts for difference, and carbon pricing mechanisms to support deployment. It also notes that hydrogen must close the safety confidence gap to unlock large-scale hydrogen production:

• Operational learning from pilot and small-scale projects is informing safer designs and procedures, but scaling is not a copy-and-paste exercise for cost or safety
• Large-scale hydrogen requires whole-system understanding, stronger standardisation and clearer safety and sustainability regulations. Regulatory frameworks are evolving, led by early-adopter countries, to build confidence, support verification, and unlock investment capital