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Much of the hydrogen discourse over the past decade has been aspirational: visions of a clean hydrogen economy, deep decarbonization of industry and transport, and futuristic power systems built around electrolysis. In many of my earlier pieces on OilPrice, I warned that hydrogen was entering a “reality phase” — where hype must give way to execution, economics, and scaling. Now we are beginning to see real projects crossing the threshold, and the balance is shifting. But the path forward is fragile: execution, policy alignment, and market demand must catch up—or momentum will stall. From ambition to action The Hydrogen Council’s Global Hydrogen Compass 2025 shows what this next phase looks like. There are now over 500 committed projects (i.e. at final investment decision, under construction, or already operating), backed by roughly $110 billion in investment. That’s up about $35 billion in a year. That’s not just ambition, it’s capital moving. Likewise, capacity commitments now exceed 6 million tonnes per year. That means for the first time, hydrogen is shifting from promise toward a tangible, investible sector. The International Energy Agency’s Global Hydrogen Review reinforces this shift noting that while hydrogen demand in 2023 reached some 97 million tonnes globally, low-emissions hydrogen (green or blue) remains a sliver of the total. Yet, projects taking FID today could push low-emissions hydrogen output fivefold by 2030, from under 1 million tonnes to over 4 million tonnes. Installed electrolyser capacity among committed projects has already jumped past 20 GW, from just over 1 GW not long ago. These numbers tell us what insiders already sense: the hydrogen field is entering a new stage. The first wave of cleaner projects is being built now; the question is whether this wave will break or crest. Challenges and fault lines But make no mistake, this phase is delicate. Many projects still exist only on paper; many more await regulatory and permitting approvals, grid connections, and commitment offtake agreements. The IEA recently cut its 2030 outlook for low-emissions hydrogen by nearly 25 % due to project cancellations, cost pressures, and policy uncertainty. That means even as capacity that’s already under construction or committed grows strongly, the broader ambition is threatened by attrition. Costs remain a major barrier, especially for electrolysers and the variable nature of renewable electricity supply. Supply chain constraints, material costs, and workforce challenges have all bitten hard. And demand-side policy is still catching up, hydrogen is only rarely mandated or rewarded by regulation in many markets. In short: scaling is underway, but it’s uneven and fragile. The phase of “reality testing” has now fully arrived. The strategic imperative for hydrogen This is precisely why neither industry nor policymakers can afford to treat hydrogen as a side project. The coming years are decisive. If capital stalls, projects fail, or policies wobble, hydrogen may slip back into being the technology of distant dreams, not of near-term energy systems. For those who follow my earlier pieces: this is exactly the moment I predicted when I described hydrogen entering a “reality inflection”, where only seriousness, discipline, and coordination will prevent it from regressing to hype. Consider the flip side: if hydrogen succeeds, it becomes a backbone of low-carbon energy systems, especially in heavy industry, long-distance transport, and storage that batteries cannot reach. The first movers gain not just returns but industrial leadership, intellectual property, and supply chain dominance. What must be done Governments must push beyond frameworks and rhetoric. They need to commit to clear demand mechanisms, mandated uptake, contracts for difference, quotas, that give developers certainty. Policy instability is hydrogen’s mortal enemy right now. At the same time, coordination is essential: grid planning, cross-border infrastructure, hydrogen transport and storage networks, and harmonized standards will unlock scale. Industry must also step up. It must deliver, not just promise. Projects that reach FID, connect to markets, and prove their economics will build confidence. The weak proposals will drop out, and that is healthy. But too much dropout would erode investor appetite for the next wave. And in financing, blended models will remain crucial. Public and private capital must be de-risked, with guarantees, subsidies, and co-investment bridging early-stage gaps. Many hydrogen projects still require leap-of-faith positioning; the first movers need support. Conclusion: The transition requires proof, not wishful thinking Hydrogen is no longer only a narrative. It is now very visibly an engineering and investment experiment, with real stakes. The first wave of projects is crossing from concept to execution. But this phase is make-or-break. The pipeline must deliver, policies must stabilize, capital must follow, and demand must materialize. If we get this right, hydrogen has the potential to be one of the pillars of a decarbonized energy future. If we get it wrong, we risk squandering the momentum, cycling back to cynicism, and delaying pathways we sorely need. I’ve written before that hydrogen would have to survive its reality test. That moment is here. Let’s hope the industry, governments, and markets rise to it. By Leon Stille for Oilprice.com More Top Reads From Oilprice.com Early Winter Ice Halts Arctic LNG Deliveries to China ExxonMobil Threatens To Leave EU Over Sustainability Rules Why Are Seattle Drivers Paying So Much More for Gas?
