Turning Point in the Hydrogen Economy: Rapid Growth of the Global Green Hydrogen Market by 2025 and South Korea’s Strategic Positioning
Editor
Rapid Growth and Cost Innovation in the Green Hydrogen Market
The global green hydrogen market is reaching a historic turning point in 2025. According to the latest report by the International Energy Agency (IEA), global green hydrogen production capacity has surpassed 15GW this year, marking a 180% increase compared to the previous year. Notably, the production cost of green hydrogen has dropped to $3.5 per kilogram, halving from $7 two years ago. This cost innovation is attributed to the decline in renewable energy generation costs and significant improvements in electrolyzer technology.
In terms of market size, the global green hydrogen market is estimated to reach $2.5 billion by 2025 and is projected to expand to a $35 billion market by 2030, with an annual growth rate of 45%. According to Bloomberg NEF’s analysis, more than 1,400 green hydrogen projects, with a total investment of $240 billion, are either planned or underway globally. Approximately 15% of these, or 360 projects, are expected to commence commercial operations by 2025, leading to a sharp increase in market supply.
In terms of technological innovation, the efficiency of PEM (Proton Exchange Membrane) electrolyzers has surpassed 80%, breaking through the commercialization threshold. Particularly, the next-generation electrolyzers developed by Siemens Energy of Germany and Nel ASA (Oslo:NEL) of Denmark show 30% higher efficiency compared to existing models. Nel ASA announced that its third-quarter revenue increased by 85% year-on-year to 1.2 billion NOK, with its order backlog exceeding 1.5 billion NOK.
In the South Korean market, green hydrogen production projects are also gaining momentum. The government has set a target to achieve 3GW of green hydrogen production capacity by 2030 and has announced a hydrogen economy roadmap worth 19 trillion KRW, with 8 trillion KRW allocated specifically to the green hydrogen sector. Hydrogen cluster construction projects centered around Ulsan, Incheon, and Busan are accelerating, with the Ulsan Green Hydrogen Cluster designed to produce 30,000 tons of green hydrogen annually upon completion in 2026.
Global Competitiveness and Market Entry Strategies of South Korean Companies
South Korean companies are gaining attention for their outstanding technological capabilities in the global green hydrogen market. Doosan Enerbility (034020) recorded a revenue of 4.12 trillion KRW in the first half of this year, growing 18% year-on-year. Notably, it has commercialized the world’s first large-capacity gas turbine capable of 100% hydrogen combustion, securing orders worth $4.5 billion in the US and Europe. The company forecasts that revenue from hydrogen turbines will reach 600 billion KRW, accounting for 15% of total revenue by the end of 2025.
Doosan Fuel Cell (336260) has achieved world-class efficiency in solid oxide fuel cell (SOFC) technology. The company’s SOFC system records an electrical efficiency of 65% and a combined heat and power efficiency of 90%, outperforming competitors by 10-15%. Its third-quarter revenue this year was 185 billion KRW, up 42% year-on-year, with orders totaling 210 billion KRW secured in the North American and European markets. Notably, a fuel cell supply contract for data centers in California guarantees 150 billion KRW in revenue over the next three years.
SK E&S (096770) is establishing an integrated business model encompassing the entire green hydrogen production and distribution process. The company is participating in green hydrogen projects worth a total of $15 billion in Australia and the Middle East, with plans to secure an annual production capacity of 1 million tons of green hydrogen by 2030. Its energy sector revenue for the first half of this year was 8.2 trillion KRW, a 25% increase year-on-year, with hydrogen-related revenue accounting for 1.1 trillion KRW.
Hanwha Solutions (009830) is focusing on a green hydrogen production system linked to solar power. Its integrated solution combining Q CELLS brand solar modules and electrolyzers is gaining attention in the Middle East and Australia. The company has signed a contract to supply a $2 billion solar-hydrogen integrated system to Saudi Arabia’s NEOM project, which will contribute to revenue over three years starting in 2026. Its renewable energy sector revenue for the third quarter this year was 1.85 trillion KRW, a 35% increase year-on-year.
In comparison with global competitors, the strengths of South Korean companies are more pronounced. Plug Power (NASDAQ:PLUG) in the US recorded a third-quarter revenue of $173 million this year but has yet to overcome its deficit. In contrast, South Korean companies are achieving profitable growth, demonstrating sustainable competitiveness. Particularly, the technological capabilities of South Korean companies are evaluated to be on par with those of Japan’s Toshiba and Germany’s Siemens.
Hyosung Heavy Industries (267270) holds a unique position in liquid hydrogen storage and transportation technology. The company’s developed liquid hydrogen storage tank has the world’s largest capacity at 2,000㎥, four times larger than the existing 500㎥ capacity. Based on this technological capability, it has signed a long-term supply contract worth $5 billion with Air Products in the US, with additional orders expected in Europe and the Middle East. Its hydrogen-related revenue for the first half of this year was 320 billion KRW, accounting for 18% of total revenue.
Market Outlook and Investment Opportunity Analysis
Structural changes in the green hydrogen market are expected to begin in earnest from the second half of 2025. According to McKinsey’s latest analysis, the production cost of green hydrogen is expected to reach parity with gray hydrogen (natural gas-based) by 2026. Currently, the production cost of green hydrogen is around $3.5 per kilogram, but it is projected to fall to $2.5 by 2026 due to the operation of large-scale production facilities and technological improvements. This is nearly equivalent to the production cost of gray hydrogen, which is $2.3.
In terms of regional market growth prospects, the Middle East and North Africa are expected to show the fastest growth. Saudi Arabia, UAE, and Morocco plan to invest a total of $80 billion in green hydrogen production utilizing abundant solar resources. The European Union has set a target to produce 10 million tons of green hydrogen and import another 10 million tons by 2030, announcing an investment of €210 billion as part of the REPowerEU plan.
In the Asia-Pacific region, Australia and Japan are playing leading roles. Australia aims to secure an annual production capacity of 5 million tons of green hydrogen by 2030, while Japan plans to invest $10 billion to establish an Asian hydrogen supply chain. China has already emerged as the world’s largest electrolyzer producer, expected to account for 60% of global electrolyzer production by 2025.
From an investment perspective, opportunities are expanding across the entire green hydrogen value chain. In the upstream sector, renewable energy and electrolyzer technology are key, while storage and transportation technology are crucial in the midstream, and fuel cells and industrial applications are important in the downstream. Goldman Sachs forecasts that investment opportunities related to green hydrogen will reach $1 trillion by 2030, with equipment investment accounting for 60%, infrastructure construction for 25%, and research and development for 15%.
South Korean government policy support is also accelerating market growth. According to the recently announced ‘4th Basic Plan for Hydrogen Economy Implementation,’ the government aims to reduce the production cost of green hydrogen to 3,000 KRW (approximately $2.3) per kilogram by 2030. To achieve this, the government is expanding tax benefits for green hydrogen production facilities and introducing a power rate discount system. Additionally, regulations on the construction of hydrogen-dedicated power plants have been relaxed to promote private investment.
Risk factors still include high initial investment costs and technological uncertainties. Large-scale green hydrogen projects require billions of dollars for gigawatt-scale electrolyzer installations, making project financing a critical challenge. Additionally, energy loss rates during the storage and transportation of green hydrogen remain high at 20-30%, making economic viability crucial. However, industry experts expect these issues to be gradually resolved through technological improvements and economies of scale.
In the long term, green hydrogen is expected to become a key means of achieving carbon neutrality. The International Renewable Energy Agency (IRENA) forecasts that hydrogen will account for 12% of the global energy system by 2050, with green hydrogen responsible for 85% of this. This represents a market worth $613 billion annually, a 250-fold increase from the current size. A golden era is approaching for South Korean companies to solidify their position in the global market based on their current technological superiority.
This content is written for investment reference purposes and is not intended as investment advice or stock recommendations. Investment decisions should be made based on individual judgment and responsibility, and investors are responsible for any losses incurred from investments. When investing in stocks, it is important to carefully consider the company’s financial status, business outlook, and market conditions before making a decision.
