Hydrogen Production Growth Hinges on Policy Clarity and Investment

Picture this: hydrogen isn’t just some fancy word on a sustainability slide deck, but a full-on powerhouse running our factories, fueling our trucks, and keeping our homes cozy. That’s the world Ivana Jemelkova, CEO of the Hydrogen Council, painted on 15 October 2025. She didn’t dwell on sci-fi gadgetry or theoretical breakthroughs. Instead, she dialed in on the nuts and bolts—policy blueprints and money pipelines—that have to click into place before hydrogen can hit its stride and become a real driver of clean energy and decarbonization.

The Policy Puzzle

Every time the administration changes gears or one region’s incentives clash with another’s, investors get jittery. Jemelkova calls it “policy fragmentation,” and she pins it as one of the biggest speed bumps on hydrogen’s highway to scale. It’s like asking someone to build a castle on shifting sand—no one knows where to drive their stake in the ground. Without a consistent, long-term playbook, private and public backers can’t map out returns or weigh risks over a 10- to 20-year span, which means projects stall or never get off the drawing board.

Investing in Hydrogen’s Future

Capital is the lifeblood of this industry. We need a steady flow of funds into production plants, pipelines, storage hubs, and refuelling stations. The Hydrogen Council—a coalition of around 140 energy, transport, industry, and investment players—has been waving red flags about erratic funding that spikes and dips like a roller coaster. Jemelkova argues that rolling financing mechanisms—think green bonds, blended finance, and public-private partnerships—can smooth out those swings, slash costs, and spark the kind of innovation that turns hydrogen infrastructure from a niche play into a mainstream energy backbone.

Green Hydrogen Production in Focus

Let’s be honest: new tech doesn’t grow on trees. Today, most green hydrogen is whipped up by splitting water via electrolysis powered by renewable juice. Yeah, costs are heading south, but only if developers are confident they can move volumes year in, year out—not just for a fleeting quarter. Then there’s blue hydrogen—made from natural gas with carbon capture. It still needs to push capture rates north of 90%, lock in long-term off-take agreements, and get comfortable on cost curves. Tilt the scales that way, and suddenly large-scale hydrogen production looks a lot more attractive to financiers.

Why Small Players Matter

Big oil and utilities might steal the spotlight, but small and medium-sized enterprises often drive the best ideas. Industry roadmaps show these agile players carving out niches in equipment manufacturing, digital maintenance services, or local distribution networks. Jemelkova gave a shout-out to these “smaller stakeholders,” pointing out that complex regulations and hefty tender sizes often leave them on the sidelines. Think local workshops in the Netherlands customizing electrolyser modules for farmers or a startup in Brazil building micro-scale storage tanks—these guys bring fresh thinking and speed. Build inclusive frameworks, she says, and you unlock competition, spark creativity, and ultimately see costs tumble.

A Global Patchwork

Every region’s moving at its own rhythm. The European Union, under REPowerEU and its polished-up Renewable Energy Directive (RED II), has its sights set on 10 million tonnes of green hydrogen by 2030, plus ironclad sustainability criteria for imports. In the US, the Inflation Reduction Act’s 45V tax credits and the DOE’s Hydrogen Earthshot are shooting to cut production costs to $1 per kilo within a decade. Japan and South Korea, grappling with energy security, are fast-tracking hydrogen fuel cell vehicles, ammonia carriers for shipping, and sharing port infrastructure bills. The snag? Most of these plans don’t align, weaving a patchwork of standards, certification schemes, and pricing signals that makes life harder for everyone.

Standards and Certification: The Unsung Hero

Standardization often gets overlooked, but it’s the glue that can hold global markets together. Agreeing on what qualifies as “green” hydrogen—whether by renewable electricity share, lifecycle emissions, or production footprint—can grease the wheels for cross-border trade and clear up investment puzzles. A small electrolyser maker in Spain shouldn’t have to hop through a dozen hoops just to ship to Germany or Japan. Harmonized regulatory frameworks are basically a passport for technology, money, and goods to move without a hiccup.

Ripple Effects Beyond Energy

Solid rules and steady investment do more than crank up gigawatts of electrolyser capacity. They can seed manufacturing hubs, create skilled jobs in engineering and construction, and slash greenhouse gas emissions in hard-to-abate industries like steel, cement, and refining. That said, going pedal to the metal without environmental or supply-chain checks could backfire—think water stress, rare earth material bottlenecks, or unplanned land use. On the bright side, progress in green hydrogen can spill into clean ammonia production, which is huge for cutting carbon footprints in fertiliser and boosting global food security.

Charting the Path Ahead

So, what’s the next move? For hydrogen to leap from pilots into everyday business, policymakers, financiers, and industry players need to get on the same page. That means harmonized policies, transparent auction rules, modular tender sizes, and co-investment vehicles that welcome both giant players and nimble startups. Only then can hydrogen cement its role as a cornerstone of sustainable energy, robust hydrogen infrastructure, and large-scale decarbonization. The technology’s primed and ready—now it’s on regulators, investors, and even the smallest market participants to lay down the tracks for a genuine clean energy revolution before the climate clock runs out.