Hydrogen Production ETF Rallies 16.7% as Sector Sees Renewed Momentum

Surge in Hydrogen Production ETF

Ever noticed how the Global X Hydrogen ETF (HYDR) has been on fire lately? In just the past week, it jumped 16.7%, and over the last month it’s up a cool 25.8%, hitting a fresh 52-week high on September 17, 2025. This rally reflects growing investor excitement that hydrogen production will play a starring role in slashing emissions for energy-hungry sectors—from heavy manufacturing to AI data centers.

Since its debut on July 12, 2021, HYDR has offered a one-stop shop for backing the green hydrogen transition. With a reasonable 0.50% expense ratio, it leans into fuel cell developers, electrolysis equipment makers, and infrastructure builders. Names like Plug Power and Bloom Energy each make up about 18% of the fund, while smaller pure plays fill out the rest of the value chain.

Stocks in the Spotlight

Of course, the ETF’s headline numbers got even more exciting thanks to two of its top holdings on September 17:

• Plug Power Inc. (PLUG) – The pioneer in hydrogen fuel cell systems for forklifts and backup power saw its shares skyrocket 19.1% in one day and a whopping 40.6% over the week. Investors cheered news of a multi-year supply alliance with a major U.S. industrial gas partner to feed its GenDrive forklifts and emerging data-center power solutions.
• Bloom Energy Corporation (BE) – Known for its modular solid oxide fuel cell technology, Bloom’s stock climbed 8.7% that same day. Its Energy Servers, delivering reliable, low-emission baseload power to utilities and large enterprises, have cemented Bloom as HYDR’s flagship holding.

These double-digit gains show how quickly sentiment can shift in the hydrogen fuel cells space—especially when strategic partnerships or commercial wins drop into investors’ inboxes.

IEA’s Cautious Outlook

Not everyone’s riding the hype train, though. The International Energy Agency (IEA) took a more measured stance in its latest Global Hydrogen Review, trimming its 2030 forecast for low-emissions hydrogen output from 49 million to 37 million metric tons per year. They point to project cancellations, rising electrolyser costs, and policy uncertainty as key drags.

Still, the IEA notes that combined capacity—operational, under construction, or at final investment decision—could swell roughly fivefold from 2024, surpassing 4 million tons per year by 2030. And as renewable build-out and tech improvements drive costs down, the gap between fossil-based hydrogen and green hydrogen should shrink. Of course, that’s all contingent on steady policy support and smooth learning curves.

What’s Driving Demand?

So, what’s fueling this rush?

• Industrial decarbonization – Steel mills, cement plants and chemical facilities need a high-density, zero-emission solution—and hydrogen production fits the bill.
• AI and data centers – Power-hungry computing hubs crave steady, zero-emission energy. Fuel cells can run 24/7, bypassing the intermittency of wind and solar.
• Technology gains – Advances in electrolysis and fuel cell stacks are steadily cutting costs, nudging green hydrogen closer to competitiveness.

That said, high upfront capital, patchy distribution networks, and the need for clear regulation still pose significant hurdles.

Historical & Ripple Effects

The hydrogen story isn’t exactly new. It grabbed headlines during the 1970s oil shocks and again when fuel cell vehicles first appeared in the early 2000s. In the 2020s, a potent mix of climate targets, government incentives, and corporate commitments reignited the narrative—yet high production costs and infrastructure gaps kept the industry in pilot phase. Today’s ETF rallies echo those cycles, but many investors hope that economies of scale and policy backing will finally tip the balance.

Collateral Impacts

Those hydrogen stock surges don’t just pad portfolios—they ripple across the entire ecosystem:

• Boost to R&D – Venture dollars are flooding into electrolyser and catalyst developers, speeding up performance improvements.
• Portfolio diversification – Funds like HYDR let investors spread risk across multiple segments of the hydrogen value chain.
• Supply chain stress – A fast-tracked rollout can tighten supplies of platinum-group metals and membrane materials.
• Market volatility – Hydrogen equities react sharply to policy shifts and partnership news, so buckle up for wild swings.

Bottom line: The hydrogen boom isn’t just about production numbers—it’s about stitching together an entire ecosystem, from gigawatt-scale electrolyser plants to regional fueling hubs.

Electrolysis and Fuel Cell Tech at Scale

At the heart of HYDR’s holdings are two powerhouse technologies:

• Electrolysers – Using electricity to split water into hydrogen and oxygen, modern proton exchange membrane (PEM) and alkaline units now boast modular, gigawatt-scale designs, driving down unit costs and cranking up output.
• Fuel Cells – By converting hydrogen back into electricity, fuel cells emit only water and heat. Breakthroughs in solid oxide and PEM stacks have pushed electrical efficiencies past 60%, up from 40–50% in earlier generations.

Advances in catalyst materials, membrane durability, and automated stack assembly are crucial for slashing capital expenses and extending system lifespans—metrics investors are watching like hawks.

Investor Takeaways

Thinking of dipping a toe into the Global X Hydrogen ETF or similar plays? Keep these in mind:

• Volatility is real – Set clear entry and exit points, or dollar-cost average to ride out the waves.
• Policy will dictate winners – Track developments in the U.S. Inflation Reduction Act, the EU Green Deal, and other regional frameworks.
• Cost curves matter – Faster drops in electrolyser and fuel cell stack prices will unlock long-term value.
• Diversify within the theme – While Plug Power and Bloom Energy anchor the fund, small-cap pure plays can offer outsized gains—and risks.

Remember: HYDR’s risk-adjusted returns have historically trailed broader clean energy peers. This rally might be just the warm-up—or a short-lived breather in a volatile cycle.

Looking Ahead

The next few quarters will be pivotal. Here’s what to watch:

• Electrolyser scale-up – Are manufacturers hitting gigawatt-scale production targets?
• Regulatory inflection points – Will fresh incentives push more projects to final investment decisions?
• Major commercial wins – Contracts with data center operators or industrial incumbents could spark new rallies.
• IEA report updates – Any tweaks to global capacity forecasts can reshape market sentiment overnight.

As hydrogen production moves from pilot to full-scale rollout, well-capitalized firms with diversified technology portfolios stand to benefit most.

ETF Snapshot

• Expense ratio: 0.50%
• Benchmark: Solactive Global Hydrogen Index
• Top holdings: Bloom Energy (~18%), Plug Power (~18%), plus a mix of electrolyser and infrastructure names.
• Historical volatility: High beta versus global markets; risk-adjusted returns trail peers.