Green Hydrogen & Green Ammonia: Pathways to Transition into Cleaner Fuels
The global energy landscape is undergoing a profound shift. The rise of green hydrogen and ammonia as mainstream energy sources is not just a trend; addressing the growing pressures of climate change, energy security, and the drive for industrial decarbonisation is necessary. These renewable fuels, produced from clean, renewable energy sources such as wind and solar, have emerged as critical enablers, reshaping global supply chains, driving sustainability, and reducing carbon emissions. These fuels are emerging as the bedrock of global energy strategies, particularly in Europe, Asia, and North America.
The result?
Industries are decarbonising faster than ever, and governments and corporations are committing significant resources to scale these fuels.
The combined hydrogen and ammonia sectors are poised for unprecedented growth, presenting an opportunity for industries to decarbonise at a pace not seen in the past. This shift represents the future of energy, and the time to act is now.
But what does the current landscape of these fuels look like?
Green Hydrogen and Green Ammonia: The Global Landscape
The global production of green hydrogen is experiencing rapid growth, with leading nations including China, the Middle East, the United States, India, Germany, Australia, and Japan taking the forefront. According to the International Energy Agency (IEA), global hydrogen supply increased by 2.5% to reach 97 MTPA in 2023, less than 1% of which was low emissions. Projections indicate that low-emission hydrogen production could reach 49 MTPA by 2030, assuming continued growth trends and the implementation of announced projects driven by decreasing renewable energy costs and advancements in electrolyser technology. In 2023, electrolyser manufacturing capacity doubled to 25 gigawatts per year (GW/yr), with China responsible for about 60% of that output. However, only 2.5 GW of this capacity was utilised in 2023. The hydrogen project pipeline to 2030 has an estimated capacity of more than 165 GW/yr, with 30% of these projects reaching the Final Investment Decision (FID) stage.
Initiatives Bridging the Green Gap
As we move into 2025, green hydrogen is no longer a distant dream but a rapidly advancing reality, with projects ranging from large-scale electrolyser installations to pilot hydrogen mobility projects. The International Energy Agency (IEA) estimates that green hydrogen could account for 10-15% of global energy needs by 2030. The rapid scaling of green hydrogen infrastructure and electrolyser technology is a key enabler of this growth.
A significant breakthrough occurred in India with the launch of its first hydrogen-powered train in 2025. Meanwhile, globally, Germany has been leading the charge with its hydrogen trains, strategising a green revolution on rail. Additionally, we witnessed Accelera, BP’s clean energy unit, spearheading a green hydrogen project in Germany, aiming to produce 11,000 tons of green hydrogen annually powered by offshore wind energy. The project is expected to be operational by 2027. In the Middle East, the UAE’s TA’ZIZ Industrial Chemical Zone has announced a 2 billion USD infrastructure plan for a hydrogen hub in Abu Dhabi, aiming to commence production of CCS-based ammonia by 2027 for both domestic use and export. Norway’s Hydrogen Valley project aims to convert natural gas into green hydrogen and ammonia for local consumption and export. At the same time, Japan has begun deploying ammonia-fueled power plants, marking a significant step toward reducing its carbon footprint. This movement, coupled with green ammonia’s rising role in maritime and energy sectors, is set to reshape how we think about energy production, storage, and consumption.
“We are seeing a paradigm shift. The speed of adoption of green hydrogen and ammonia is unlike anything we’ve seen in the past decade. It’s an energy revolution.”
Green hydrogen is produced by splitting water into hydrogen and oxygen through electrolysis powered by renewable electricity. This clean fuel has vast potential, especially in hard-to-abate sectors like steel manufacturing, long-haul transport, and chemical industries. Currently, the hydrogen supply chain relies heavily on “gray” hydrogen, produced from natural gas, accounting for about 95% of global hydrogen production. However, green hydrogen is gaining ground as countries and companies prioritise clean energy alternatives. The global demand for green hydrogen is driven by industrial giants, energy providers, and transportation sectors. Companies such as Siemens Energy, Orsted, Air Products, and Yara International are investing heavily in scaling green hydrogen production and infrastructure. Siemens Energy, for instance, has partnered with global utilities to scale hydrogen production, while Orsted is actively building large-scale hydrogen facilities.
Green ammonia, produced by combining nitrogen from the air with green hydrogen, is a key component in the production of fertilisers, but its potential extends far beyond agriculture. It can be used as a zero-emission fuel for power generation, shipping, and industrial heating. Ammonia is also easier to store and transport than hydrogen, making it an attractive alternative for countries with limited access to renewable energy sources.
Several major policy initiatives drive the future of green hydrogen and ammonia, positioning them as cornerstone solutions for the global energy transition. The European Green Deal is leading the way with policies to increase green hydrogen production, incentivise investment, and foster a competitive hydrogen market within the EU. In the U.S., the Inflation Reduction Act offers substantial tax credits and grants, accelerating the development of green hydrogen technologies and making them more economically viable. Meanwhile, Japan’s Green Hydrogen Strategy focuses on ammonia as a key fuel for power generation, creating a robust demand for clean hydrogen and ammonia in the region. These policy shifts foster international collaboration, scale hydrogen production, and ensure that green hydrogen and ammonia become essential elements in achieving net-zero emissions. These initiatives’ combined effect sets the stage for a sustainable, hydrogen-powered future.
Gaps in this ambitious transition
Despite the rapid progress, several gaps must be addressed for a smooth transition to green hydrogen and ammonia. High initial investment remains a significant challenge, especially for countries like India and Brazil, which lead to renewable energy production and face challenges in scaling up hydrogen infrastructure and ensuring affordable access to fuel. Additionally, storage and transportation limitations due to hydrogen’s low energy density hinder its global distribution, with green ammonia offering a potential solution but still facing challenges related to cost and scalability. Regulatory uncertainty further complicates the market, as inconsistent standards across regions, such as between Europe and Africa, prevent the development of a cohesive global hydrogen economy. Addressing these gaps is crucial for enabling the widespread adoption of green fuels.
Future Initiatives to Fill the Gaps
To overcome these challenges, governments and companies must adopt a multifaceted strategy that combines global collaboration for demand creation, policy reforms, and technological innovation.
Demand Creation
Germany has launched the H2Global Initiative, which seeks to foster the creation of a hydrogen marketplace. This initiative enables collaboration between hydrogen producers and large-scale buyers, such as steel and chemical industries, to secure long-term hydrogen contracts. Germany has also been pushing for demand in maritime transport, where green ammonia is considered an alternative fuel. This initiative is part of a broader strategy to establish Germany as a European hydrogen hub. Demand creation through collaborative efforts between governments, private companies, and industries is significant in sectors like steel production, maritime shipping, and aviation, where hydrogen can significantly reduce emissions. By establishing hydrogen hubs and incentivising corporate partnerships, governments can create the demand to scale production.
Policy Reforms to Stimulate Investment and Innovation
Policy reforms are crucial to accelerate the adoption of green hydrogen and ammonia. Governments worldwide are introducing legislative frameworks, tax incentives, and green bonds to stimulate investment in green technologies. The U.S. Inflation Reduction Act (IRA) includes tax credits for clean hydrogen projects and incentives for companies that scale up production of low-carbon fuels. The Act has already started showing results, with several major companies announcing new green hydrogen plants and hydrogen fuel production projects across the U.S. In 2025, Plug Power, a U.S.-based hydrogen supplier, secured a substantial tax credit under the IRA, leading to the development of a large-scale green hydrogen facility in Texas. This facility will supply hydrogen to both industrial and transportation sectors, helping reduce carbon emissions significantly.
Infrastructure and Technological Advancements
The lack of hydrogen infrastructure, particularly in storage, transportation, and refuelling, is one of the primary barriers to scaling green hydrogen and ammonia. Governments and private investors must collaborate to build a comprehensive hydrogen infrastructure network that spans production, storage, and distribution. Investment in hydrogen refuelling stations, pipelines, and storage tanks is necessary for supporting the widespread use of hydrogen in various sectors.
In Japan, the government is already making significant strides in this direction with its Green Hydrogen Strategy, which includes building the infrastructure necessary for hydrogen mobility and power generation. For example, Japan has rolled out hydrogen refuelling stations in major cities to support hydrogen-powered vehicles. Additionally, Japan is partnering with Australia to establish a hydrogen supply chain to see green hydrogen produced in Australia and transported to Japan for power generation and industrial applications.
International Collaboration and Standardization
Australia and South Korea have launched an ambitious initiative to create an Asia-Pacific hydrogen market. This partnership is focused on establishing common standards for hydrogen production, transport, and storage, ensuring that green hydrogen can be traded across borders. As part of this initiative, Australia is expanding its hydrogen export infrastructure, including ports and pipelines, while South Korea is investing heavily in hydrogen-powered transport, particularly in maritime shipping. The hydrogen market needs consistent regulations and policies that facilitate cross-border trade, infrastructure development, and technology exchange. International collaboration can help increase production and make hydrogen more affordable and accessible.
Technological Advancements in Hydrogen Production
While electrolysis remains the most widely used method, improving its efficiency and lowering the cost of electrolysers is critical to reducing the price of green hydrogen. China, a major player in the hydrogen economy, is investing heavily in innovative hydrogen production technologies. Chinese companies are leading the development of new electrolysis systems that use renewable energy sources, such as solar and wind, to produce green hydrogen more efficiently. In 2025, China announced its plans to increase the capacity of its green hydrogen plants by 50% in the next five years, further cementing its role as a global leader in hydrogen production.
The Road Ahead
The future of green hydrogen and ammonia is promising, but the journey is complex. The green transition fuels market is rapidly growing, driven by technological advancements, falling renewable energy costs, and aggressive global decarbonisation targets.
However, transitioning to these renewable fuels is no small feat. It requires overcoming significant infrastructure, costs, and regulatory alignment challenges. ASCELA is committed to providing the strategic guidance and market insights that companies need to successfully navigate this shift and capitalise on future renewable energy opportunities.
At ASCELA, we are at the forefront of strategic advisory services, helping businesses navigate the complexities of the green energy transition. Our deep expertise in mobility and supply chains enables us to provide actionable insights and solutions for organisations seeking to adopt green hydrogen and green ammonia in their operations.
As the transition to green fuels accelerates, we are working with key industry stakeholders to implement our multifaceted strategy, which combines collaboration for demand creation, policy reforms, and technological innovation to streamline the logistical challenges of scaling these technologies. This approach also identifies cost-effective pathways for production, distribution, and integration. We also assist companies in leveraging government incentives to reduce the financial risks of adopting green technologies.
ASCELA’s strategic consulting empowers industries to optimise their green hydrogen and ammonia supply chains, helping them scale sustainably while addressing market complexities.
As we look towards 2025 and beyond, we can overcome the existing challenges to build a sustainable and carbon-neutral future with the right mix of global cooperation, targeted investments, and innovative technology.
Author:
Ayushi Gupta
Consultant
Strategic Advisory- Mobility and Supply Chain