Introductory Overview
The ADSW Advisory Committee Insights Report on Green Hydrogen and Future Fuels presents the outcomes of a 2026 closed-door dialogue convened under Abu Dhabi Sustainability Week and hosted by Masdar. The committee brought together senior representatives from government, industry, finance, and academia to assess the state of green hydrogen development and identify actions required to accelerate deployment.
The report frames green hydrogen as having moved from conceptual discussion to early-stage implementation. Dozens of countries have adopted national hydrogen strategies, with more in development. Green hydrogen is positioned as a potential contributor to net-zero targets while offering economic benefits including job creation, energy security, and industrial development.
Despite this momentum, green hydrogen represents less than 1% of global hydrogen supply, which remains dominated by fossil fuel-based production. High costs, limited offtake agreements, regulatory uncertainty, and investor caution are identified as major constraints. The report structures its analysis around trade, supply-side readiness, demand creation, infrastructure, regulation, and finance.
Global Green Hydrogen Trade
The committee characterized global green hydrogen trade as nascent but strategically significant. Inconsistent regulatory standards and high technological barriers currently limit production and trade volumes. Harmonized frameworks are described as prerequisites for scaling cross-border hydrogen commerce.
Free trade agreements were discussed as potential enablers. A hypothetical hydrogen-focused agreement between the UAE and the European Union was cited as logical given Middle Eastern renewable energy potential and Europe’s demand for clean energy imports. However, divergent reporting standards, particularly concerning indirect carbon dioxide emissions, present diplomatic obstacles. As a result, near-term comprehensive trade agreements focused solely on hydrogen are considered unlikely.
The report highlights increasing attention toward Asia. India has set a target to produce 5 million metric tonnes of green hydrogen annually by 2030, supported by 125 GW of renewable energy capacity. China has announced shorter-term ambitions of producing 100,000 to 200,000 tonnes annually by the end of 2025 and is already exceeding those targets through rapid industrial scaling. China’s approach, involving approximately 120 competing firms, is driving cost reductions, experimentation, and capacity expansion.
This dynamic raises strategic questions for other economies: whether to prioritize domestic hydrogen production at higher cost or secure imports at lower prices. The report stresses that no single strategy fits all contexts, but emphasizes that fair competition and common standards are essential to prevent market fragmentation.
International bodies such as IRENA, the Hydrogen Council, and IPHE are identified as platforms for advancing standardization and interoperability. Early bilateral agreements, including European hydrogen import partnerships and Japan’s supply agreements with Australia and the UAE, are cited as precedents that may guide future trade arrangements.
The Supply Side – Technology Development and Supply Chain Resilience
The committee examined supply-side constraints, noting that approximately 60% of green hydrogen value lies in end-use technologies, 25% in production, and 15% in midstream activities. This distribution highlights opportunities for domestic value creation through localized technology deployment rather than immediate pursuit of gigawatt-scale projects.
Members emphasized the importance of phased scaling. Starting with smaller-scale facilities allows business models to be tested, supply chains to be built, and technical expertise to mature. Racing directly toward large-scale capacity without proven demand and infrastructure was viewed as risky.
Supply chain resilience emerged as a critical concern. Overreliance on a single country or manufacturer for key technologies could introduce vulnerabilities similar to past energy dependencies. Regional partnerships such as collaborations between Middle Eastern producers and European or Asian technology firms—were identified as mechanisms to diversify manufacturing and reduce exposure to trade disruptions.
Technological innovation remains ongoing across electrolyzer designs, hydrogen carriers, and end-use applications. The report references solid oxide and anion exchange membrane electrolyzers, liquid organic hydrogen carriers, hydrogen turbines, and high-temperature fuel cells as areas requiring continued research and demonstration.
A key bottleneck identified is the absence of end-to-end performance guarantees for integrated hydrogen systems. While individual components may carry warranties, no entity currently guarantees full system performance. This uncertainty increases financing risk. Collaboration among equipment manufacturers, insurers, and potentially public institutions was discussed as a pathway to risk-sharing for early projects.
Standardization of equipment performance, interoperability, and safety remains incomplete. While international and national standards bodies are progressing, alignment must keep pace with deployment to avoid delays.
The Demand Side – Mandates and Consumer Innovation
The report underscores that supply growth cannot occur without parallel demand creation. A lack of bankable offtake agreements is identified as a primary reason many hydrogen projects fail to reach financial close.
Government mandates are presented as effective demand stimulators. India’s requirements for fertilizer plants to source an increasing share of hydrogen from green sources and refinery blending mandates are cited as examples of policies that create guaranteed markets. Such consumption obligations can be paired with incentives such as tax credits to balance cost differentials.
Beyond mandates, demand aggregation through industrial clustering was discussed. Hydrogen valleys or hubs, where production is co-located with multiple industrial offtakers, can improve logistics and infrastructure utilization. Fertilizer plants, refineries, and steel producers clustered near electrolyzers and renewable energy facilities can share pipelines and storage systems.
Innovative market mechanisms also play a role. Germany’s H2Global program was highlighted as a contract-for-difference model in which a public entity purchases green hydrogen at a fixed price and resells it through auctions, covering the price gap. This structure enhances bankability and aggregates demand at scale.
Early adopters with higher risk tolerance, including defense and space sectors, may help anchor initial demand. Their participation could send strong market signals to producers while broader industrial adoption develops.
The Technical Side – Infrastructure and Regulatory Frameworks
The report emphasizes that infrastructure and regulation form the foundation of a hydrogen economy. Transitioning from localized industrial use to global energy trade requires extensive development of pipelines, ports, storage facilities, and fueling stations.
Long lead times necessitate early planning. Fragmented national infrastructure planning risks foreclosing future trade opportunities. Coordinated initiatives such as the European Hydrogen Backbone demonstrate how existing gas pipelines can be repurposed for hydrogen transport. Similar concepts are being explored in the Middle East and Southeast Asia.
National strategies should identify which pipelines can be converted, where new infrastructure is required, and how production hubs connect to demand centers. These decisions are time-sensitive if 2030 targets are to be met.
Regulatory clarity is equally critical. Safety standards, permitting processes, and operational codes must be finalized. The UAE’s Low Carbon Hydrogen Policy and Strategy and updates to gas regulations to include hydrogen blending were cited as examples of enabling approaches.
Hydrogen storage is identified as an often-overlooked challenge. Effective storage solutions are necessary to balance variable renewable supply and industrial demand. Regulatory frameworks must address site development, safety, and system integration.
Grid integration decisions—such as blending hydrogen into natural gas networks versus building dedicated pipelines—require clarity on tariffs, third-party access, and gas quality certification. Resolving these issues is essential for investor confidence.
The Financial Side – Scaling Investment Models and Project Finance Tools
Financing is described as decisive for hydrogen deployment. The capital required spans electrolysis plants, renewable generation, transport infrastructure, and industrial conversion. Traditional project finance models struggle with hydrogen’s cost and demand uncertainties.
Committee members compared current conditions to the early days of renewable energy, when projects required policy-backed revenue certainty. Green hydrogen faces a persistent gap between production cost and market price, undermining bankability.
Financial de-risking mechanisms are therefore essential. Governments can assume price risk through contracts for difference, long-term offtake agreements, or regulated asset models, enabling projects to secure debt financing.
Policy clarity over project lifetimes was repeatedly cited as a prerequisite for investment. Many announced projects remain stalled pending regulatory certainty. Detailed hydrogen roadmaps covering permitting, support schemes, and infrastructure planning can reduce investor hesitation.
The cost of capital poses additional challenges, particularly in developing markets. Green finance instruments such as green bonds and sustainability-linked loans may help lower financing costs. Early indications suggest growing institutional interest in flagship hydrogen projects aligned with climate finance commitments.
Key Takeaways
The report concludes that harmonized global standards are essential to unlock hydrogen trade. Demand creation through mandates and aggregation is as important as supply-side scaling. Pragmatic, phased development starting small and scaling through hubs reduces risk.
Resilient and diversified supply chains are necessary to avoid geopolitical and commercial vulnerabilities. Green hydrogen strategies must be tailored to regional and sectoral contexts rather than applied uniformly.
Closing Synthesis
The 2026 Advisory Committee discussions position green hydrogen at a critical transition point. The foundations for a global hydrogen economy are forming, but progress depends on coordinated action across trade policy, technology development, demand creation, infrastructure planning, and financial structuring. Decisions taken in the near term will determine whether green hydrogen evolves into a scalable, competitive component of the global energy system.
