The prospect of supplying lower-emissions products to European markets can support investment in hydrogen production, but access to an export market alone does not make projects bankable.
The International Energy Agency’s Global Hydrogen Review 2026 reports that global low-emissions hydrogen production reached approximately one million tonnes in 2025. National targets indicate potential production of almost 27 million tonnes annually by 2030, while projects that have reached final investment decision (FID) represent just over four million tonnes.
Demand and costs remain barriers to deployment
The IEA identifies demand uncertainty, cost gaps, policy delays and infrastructure constraints among the factors limiting deployment of low-emissions hydrogen.
For hydrogen and fertiliser developers, CBAM can provide a potential source of commercial value when lower embedded emissions improve access to European customers.
That potential value, however, needs to be converted into dependable sales before it can underpin project economics.
Buyers and certification shape project financing
Long-term purchase commitments, credible emissions certification and financing arrangements remain central to investment decisions for hydrogen projects.
The development pipeline therefore depends on more than favourable carbon-border economics. Developers also need buyers and lenders to accept the assumptions linking emissions performance with future revenue.
