Hydrogen investment appetite rebounds on ‘grounded’ market shift, says law firm

The survey, conducted by Pinsent & Mason and Censuswide among 1,000 venture global investors and technology developers, found that over 29% of respondents are considering investments in hydrogen, up from 21% last year.

The increase placed hydrogen ahead of more mature green energy sectors, such as wind and solar, in terms of investor interest.

According to the survey, all clean hydrogen production routes were “attracting attention” due to “increasing demand” from industry, transport, and energy-system balancing.

While a lack of credible and demonstrable offtake has broadly beset the industry over recent years, Laura Ayre, supply chain expert with the firm, said the survey uncovered a “renewed confidence” across global markets.

This stems from a “grounded” approach across the sector, with a tight-knit base of end-use sectors like heavy industry and shipping seeing a growing number of long-term offtake agreements.

The findings come after a difficult period for the hydrogen sector, marked by project delays, slower-than-expected demand growth, and concerns over the commercial viability of large-scale green hydrogen production.

However, Pinsent & Mason’s Ayre warned that hydrogen infrastructure constraints comprise a continued bottleneck that increases investment risk.

“Physical infrastructure required for hydrogen at scale – pipelines, port facilities, grid connections sufficient for large electrolyser stacks – involves lead times that are not always reflected in project timelines,” she said.

Despite improving sentiment, many hydrogen projects still struggle to secure binding offtake agreements capable of underpinning financing decisions. High production costs and uncertainty over long-term policy support continue to weaken the investment case for large-scale deployment.

The results reinforce a growing industry consensus that hydrogen demand will concentrate in hard-to-abate sectors rather than broad economy-wide energy substitution. An International Energy Agency report in March said industrial use would likely remain the “backbone” of future clean hydrogen demand.