Middle East crisis exposes vulnerabilities in global hydrogen supply chains: IEA

Paris: The ongoing conflict in the Middle East has disrupted global hydrogen supply chains, exposing vulnerabilities in industries such as fertiliser production, refining and chemicals manufacturing, according to a new report by the International Energy Agency (IEA). The latest edition of the Global Hydrogen Review found that the crisis has highlighted how dependent global economies are on hydrogen-based products and the central role of the Middle East in these supply networks. Supply chain pressures The IEA said the disruption has affected both production and trade, creating challenges for sectors that rely heavily on hydrogen derivatives, particularly fertilisers and industrial feedstocks. IEA Executive Director Fatih Birol noted that the current situation has underscored the need for more resilient and diversified energy systems. “The current crisis has highlighted how deeply economies around the world depend on trade in hydrogen-based products,” he said. Growing demand, limited supply Global demand for hydrogen exceeded 100 million tonnes in 2025, while production of low-emissions hydrogen grew by 20 percent to nearly 1 million tonnes. Despite this growth, the report warned that low-emissions hydrogen remains far below the level required to meet global decarbonisation and energy security goals. Barriers slowing progress The IEA identified several persistent challenges hindering the sector’s growth, including high production costs, uncertain demand, regulatory complexities and limited infrastructure. As a result, many national targets for 2030 are increasingly at risk, with the pipeline of announced low-emissions hydrogen projects shrinking significantly. The report noted that expected production capacity by 2030 has declined to 27 million tonnes, with projects reaching final investment decisions falling to just over 6 million tonnes, compared to 10 million tonnes previously. Weak demand signals Demand remains one of the sector’s largest challenges. The volume of hydrogen covered by new offtake agreements remained low in 2025, with only about 20 percent backed by firm contractual commitments. The lack of demand certainty continues to limit investment and delay project development. Future potential Despite current challenges, the IEA said hydrogen could play a key role in supporting industrial development and improving food security, particularly through local fertiliser production. The report also highlighted opportunities for regions such as Africa to expand into higher-value industries like steel production, provided financing costs are reduced and hydrogen strategies are aligned with broader economic plans. Energy security focus The crisis has renewed interest in hydrogen as a long-term energy security solution, although the IEA stressed that stronger policy support and faster deployment are required for it to have a meaningful impact. The findings highlight the importance of accelerating development in the hydrogen sector to ensure more resilient supply chains and support global energy transition goals.