A sustained global focus on energy security and accelerating demand in China will drive a massive expansion of the hydrogen sector, with cumulative investments projected to reach $3.2 trillion by 2060, according to DNV’s Energy Transition Outlook: Hydrogen to 2060 report.
The report forecasts that hydrogen volumes will grow significantly over the coming decades, with overall production expected to rise sharply compared to today’s levels. DNV noted that China will be at the centre of this expansion, accounting for 35% of new hydrogen production and consumption over the forecast period.
DNV said clean hydrogen uptake will be strongest in emerging demand sectors by 2060, led by steelmaking, aviation, and maritime transport, which are projected to account for 18%, 18% and 15% of total clean hydrogen use respectively.
Established demand sectors such as fertiliser and methanol production are also expected to decarbonise large parts of their supply chains, with each sector forecast to contribute about 13% of clean hydrogen consumption.
However, the report highlighted major challenges facing the industry. DNV revealed it has revised down its 2050 hydrogen forecast by 35% compared with its 2022 outlook, citing limited policy support and the slow conversion of early ambition into large-scale projects.
The outlook also reflects continued progress in electrification technologies, which has reduced hydrogen’s role in certain sectors previously expected to adopt it more aggressively.
Commenting on the findings, Ditlev Engel, CEO of Energy Systems at DNV, said hydrogen remains essential for decarbonising hard-to-abate sectors and strengthening national energy security.
“The hydrogen industry is poised for growth, but it is a fragile stance. Hydrogen completes the most difficult aspects of the decarbonisation drive that so many nations have committed to,” Engel said.
DNV projects that half of new renewable electrolysis-based hydrogen capacity added by 2030 will be installed in Europe and China, noting that China already holds 60% of global electrolyser manufacturing capacity. This advantage, combined with its expanding wind and solar generation, is expected to position China as the world’s leading renewable hydrogen producer.
The report added that energy security concerns will increasingly influence hydrogen policy, particularly in energy-importing countries seeking to reduce dependence on volatile fossil fuel markets and protect critical industries.
DNV further noted that geopolitical tensions are accelerating investment decisions, with renewable electrolysis-based capacity expected to rise to 10 million tonnes per year by 2030, compared to 1.5 million tonnes per year installed in 2025.
In the medium term, DNV warned that instability in the Middle East could increase the use of coal-based hydrogen for ammonia and fertiliser production, as countries seek to safeguard food supply chains.
The report also stressed that the hydrogen sector’s growth will depend on closing safety confidence gaps and ensuring emissions reductions are properly documented. It called for stronger standardisation and improved certification frameworks to build investor confidence.
Magnus Killingland, DNV’s Global Segment Lead for Hydrogen, said future progress will depend on strengthening regulations and verifying technical performance.
“Going forward, it is about fine-tuning the regulations, implementing these in legislation, and verifying safety concepts, documenting technical performance, and certifying emission reductions,” Killingland said.
Source: Energy Connect
