The momentum behind green hydrogen in Asia-Pacific is unmistakable. By 2026, the region is projected to account for over 40% of the global green hydrogen market, driven by rapid industrialisation, expanding renewable energy capacity and increasingly assertive climate policies.
The global energy transition has entered a decisive decade, and nowhere is this more apparent than in the Asia-Pacific region. Long defined by its dependence on imported fossil fuels, the region is now positioning itself at the forefront of a new energy economy centred on green hydrogen. As governments, industrial giants and investors accelerate their commitments, a critical question emerges: can green hydrogen evolve into Asia’s next major export industry while simultaneously underpinning energy independence and industrial decarbonisation?
The momentum behind green hydrogen in Asia-Pacific is unmistakable. By 2026, the region is projected to account for over 40% of the global green hydrogen market, driven by rapid industrialisation, expanding renewable energy capacity and increasingly assertive climate policies. This growth reflects not merely environmental ambition but a structural shift in how energy is produced, consumed and traded. Nations such as Japan, South Korea, China, India and Australia are no longer passive participants in global energy markets; they are actively attempting to reshape them.
At its core, green hydrogen offers a compelling proposition. Produced through electrolysis powered by renewable energy, it provides a zero-carbon fuel capable of decarbonising sectors that electrification alone cannot reach. Heavy industries such as steel, chemicals and refining-cornerstones of Asia’s economic growth-are increasingly adopting hydrogen to reduce emissions. In South Korea, for instance, major steelmakers are exploring hydrogen-based production methods to replace coal-intensive processes, signalling a broader industrial pivot.
Yet the significance of green hydrogen in Asia-Pacific extends beyond domestic decarbonisation. It is equally about energy sovereignty. The region has historically been vulnerable to supply shocks, geopolitical tensions and price volatility in oil and gas markets. Recent disruptions to fuel flows in Asia have reinforced the fragility of this dependency, prompting governments to diversify energy sources and localise supply chains. In this context, green hydrogen represents not just a cleaner alternative, but a strategic asset.
Countries rich in renewable resources are particularly well placed to capitalise on this opportunity. Australia, with its vast solar and wind potential, is developing large-scale hydrogen export projects aimed at supplying energy-hungry Asian economies. Similarly, India has set an ambitious target to become a global hub, aiming to capture a significant share of international demand by 2030. These ambitions are already translating into tangible commercial agreements. In 2026, a landmark $3 billion deal between an Indian conglomerate and a South Korean firm to supply ammonia, an efficient carrier of hydrogen, underscored the emergence of cross-border hydrogen trade in the region.
Such developments point towards the formation of a new energy trade architecture. Unlike traditional hydrocarbons, hydrogen can be transported in multiple forms, including liquefied hydrogen and ammonia, enabling long-distance exports. Japan, a resource-poor nation with deep decarbonisation commitments, is investing heavily in hydrogen import infrastructure, including next-generation liquefied hydrogen carriers designed to scale global supply chains. This dynamic, resource-rich exporters and technology-driven importers mirrors the historical oil trade, albeit with a low-carbon foundation.
However, the pathway to establishing a robust hydrogen export industry is far from straightforward. Cost remains the most formidable barrier. Green hydrogen production is still significantly more expensive than conventional “grey” hydrogen derived from fossil fuels. Although technological advancements and economies of scale are expected to reduce costs over time, the pace of decline remains uncertain. Electrolyser technology, while improving, requires substantial capital investment and access to cheap renewable electricity, conditions not uniformly available across the region.
Infrastructure presents another critical challenge. Building an integrated hydrogen economy requires not only production facilities but also storage, transport and end-use infrastructure. Ports must be retrofitted, pipelines constructed and industrial processes redesigned. The scale of investment required is immense, with estimates suggesting tens of billions of dollars will be needed in leading markets alone over the coming decade.
Moreover, the gap between ambition and execution is increasingly evident. While governments and corporations have announced a vast pipeline of hydrogen projects, a relatively small proportion have reached final investment decisions or entered operational phases. Some high-profile projects have stalled due to financing constraints, uncertain demand and evolving regulatory frameworks. This underscores a broader industry reality: the transition from pilot projects to commercially viable scale remains a complex and capital-intensive undertaking.
Despite these headwinds, the strategic logic underpinning Asia-Pacific’s hydrogen push remains compelling. The region’s industrial base is uniquely suited to benefit from hydrogen integration. Steel production, for instance, is responsible for a significant share of global carbon emissions, and Asia dominates global output. The shift towards “green steel”, powered by hydrogen, could fundamentally alter the emissions profile of the sector while creating new export opportunities for low-carbon materials.
Similarly, the chemicals and fertiliser industries-major consumers of hydrogen-stand to gain from transitioning to green alternatives. The production of ammonia, a key input for fertilisers, is particularly significant. As demonstrated by recent long-term supply agreements, green ammonia is emerging as a critical vector for hydrogen trade, enabling countries to decarbonise agriculture while facilitating international energy flows.
The interplay between domestic decarbonisation and export potential is central to the region’s hydrogen strategy. Unlike fossil fuels, which are extracted and exported largely independently of domestic consumption, green hydrogen production is closely linked to renewable energy deployment. This creates a virtuous cycle: investment in renewables supports hydrogen production, which in turn drives further investment in clean energy infrastructure.
For policymakers, this dual benefit is highly attractive. Green hydrogen offers a pathway to reduce emissions, enhance energy security and stimulate economic growth through new industries and job creation. In countries such as India, large-scale hydrogen projects are already being positioned as catalysts for industrial development, technology transfer and regional economic revitalisation.
Yet the question remains: can green hydrogen truly become Asia’s next great export industry? The answer depends on several interrelated factors. First, cost competitiveness must improve significantly to compete with fossil fuels and other low-carbon alternatives. This will require sustained technological innovation, supportive policy frameworks and substantial public and private investment.
Second, demand must materialise at scale. While commitments from countries like Japan and South Korea are encouraging, global demand for green hydrogen is still in its infancy. Long-term offtake agreements, such as the recent India–South Korea deal, will be crucial in providing the certainty needed to unlock investment.
Third, international collaboration will be essential. Hydrogen supply chains are inherently global, requiring coordination between producers, transporters and consumers. Standardisation of regulations, certification of green hydrogen and alignment of policy incentives will play a pivotal role in enabling cross-border trade.
