Hydrogen Still Sells by the Tonne, Not the Megawatt-Hour
Global hydrogen demand topped 100 million tonnes in 2025, almost all of it in refining and industry — a reminder that the market prices a chemical feedstock, not stored electricity.
Global hydrogen demand exceeded 100 million tonnes in 2025, with almost all of it consumed in refining and industrial chemistry, the sectors that have bought hydrogen by the kilogram for decades.
Hydrogen has spent the better part of a decade being talked about as an energy carrier. The market, meanwhile, keeps behaving like a chemicals market. Global demand exceeded 100 million tonnes in 2025, and almost all of that volume went where hydrogen has gone for decades: oil refining and industrial processes. Not into turbines, not into pipelines feeding home boilers, not into fuel-cell fleets. Into hydrocrackers and ammonia synthesis loops.
That distinction is not pedantry about units. It determines who the buyers are, what they are willing to pay, and which projects get financed. A refinery does not purchase megawatt-hours. It purchases a reagent, delivered at pressure and purity, priced per kilogram, against a contract that runs for years and gets audited against process yield.
Why the unit you quote changes the business you describe
Converting hydrogen volumes into energy units is a legitimate engineering exercise. It is also a rhetorical one. Expressed in terawatt-hours, a 100-million-tonne market looks like a slice of the global energy system, which invites comparison with electricity generation, gas grids and national energy plans. Expressed in tonnes, it looks like what it is: one of the largest industrial gas businesses on earth, tightly bound to two end uses.
The consequence is a mismatch in expectations. Energy-unit framing implies a market that can absorb enormous new supply because energy demand is enormous. Tonnage framing implies a market where every incremental tonne has to displace an existing tonne, usually one produced on-site from natural gas at a cost the buyer already knows to several decimal places.
As CleanTechnica argues, kilograms and tonnes are not merely traditional units carried over from an older industry. They describe the market that actually exists.
The buyer is a chemist, not a utility
An ammonia plant buys a chemical. That sentence carries more weight than it first appears to. Ammonia synthesis needs hydrogen as a molecule — the nitrogen fixation reaction will not accept electricity in its place. The same is true of methanol synthesis and of the hydrotreating and hydrocracking steps that strip sulphur out of fuels and break heavy fractions into lighter ones.
Those buyers share a set of traits that make them very different customers from a power utility:
- Purity is contractual. Catalysts are poisoned by contaminants, so specification, not just volume, is the deliverable.
- Interruption is expensive. Continuous processes cannot ramp with the weather; storage or firm backup is a cost of doing business, not an afterthought.
- Location is fixed. Existing plants sit where they sit. Hydrogen is awkward and costly to move far, which is why so much of it is made on-site.
- The incumbent cost is known. Steam methane reforming has decades of operating data behind it, and it sets the price any new supplier has to beat or subsidise around.
None of that resembles selling into a wholesale power market. It resembles selling into a specialty chemicals supply chain, with the procurement discipline that implies.
What tonnage framing implies for project pipelines
If almost all of the existing 100-million-tonne-plus market is refining and industry, then the realistic near-term opportunity for low-carbon hydrogen is substitution inside those same facilities — replacing grey molecules with cleaner ones at the same gate, to the same spec. That is a smaller, harder, more commercially specific target than the sweeping energy-transition narrative suggests, but it has one large advantage: the demand is already there, metered and contracted.
The speculative end of the pipeline points elsewhere: hydrogen for power generation, for heating, for long-haul trucking, for blending into gas networks. Those applications are where the megawatt-hour framing lives, and they are where hydrogen competes not against grey hydrogen but against electricity delivered directly, batteries, and heat pumps. In those contests the round-trip losses of making, moving and reconverting a molecule are the whole argument, and they are unfavourable.
The speculative end of the pipeline points elsewhere: hydrogen for power generation, for heating, for long-haul trucking, for blending into gas networks.
For anyone underwriting a project, the practical test is blunt: is there a named buyer with a process that requires the molecule, or is the offtake a forecast of a market that does not yet purchase anything? The first kind of project has a customer. The second has a thesis.
Where the battery and metals complex fits
The tonnage view also reframes the competition for capital. Electrolysers consume electricity, critical metals and land to produce a molecule that, in most energy applications, then gets converted back into work at a loss. Batteries and grid infrastructure take the same electricity and deliver it as electricity. When hydrogen is framed in energy units, those two paths look like rivals for the same job. When hydrogen is framed in tonnes, they largely are not: one supplies a chemical feedstock, the other supplies energy services.
That is arguably the more useful way for investors in the wider clean-energy and battery-metals complex to hold both ideas at once. Industrial hydrogen decarbonisation is a real, large and durable market with identifiable customers. Hydrogen as a general-purpose energy carrier is a much more contested proposition, and the enthusiasm gap between the two has been sustained partly by the choice of units.
The market backdrop as this landed
The argument arrives during a broadly steady session for US equities. As of the last trade at 16:35 GMT on 25 August 2026, the S&P 500 tracker (NYSEARCA: SPY) was at $765.77, up 0.30% on the day from a previous close of $763.47, having traded between $763.05 and $766.78. The Nasdaq 100 proxy (NASDAQ: QQQ) stood at $711.06, up 0.67%, with a day range of $707.45 to $714.04. The Dow tracker (NYSEARCA: DIA) was at $534.56, up 0.17%.
Nothing in a quiet risk-on tape resolves the hydrogen question, but it does describe the environment in which capital allocation decisions are being made: no distress premium, no panic, and therefore a market that will look hard at unit economics rather than narrative.
What to watch
Three things will show whether the tonnage reading is right. First, whether new low-carbon hydrogen capacity is contracted to existing refineries and ammonia or methanol plants, or to prospective energy customers. Second, whether policy support continues to be denominated in energy units — a framing that quietly favours projects aimed at speculative demand. Third, whether the industrial buyers themselves start writing long-term, spec-bound offtake agreements at prices that clear without a subsidy bridge.
Until then, the safest assumption is the one the 2025 demand figure supports: this is a market that counts in tonnes, buys a chemical, and will keep doing so regardless of how many megawatt-hours get assigned to it in a slide deck.
Key facts
- 2025 global hydrogen demand: More than 100 million tonnes
- Dominant end uses: Refining and industry, almost all of the total
- S&P 500 tracker (SPY): $765.77, +0.30%, as of 16:35 GMT Aug 25, 2026
- Nasdaq 100 tracker (QQQ): $711.06, +0.67%, as of 16:35 GMT Aug 25, 2026
Frequently asked questions
How large was global hydrogen demand in 2025?
Global hydrogen demand exceeded 100 million tonnes in 2025. Almost all of that volume was consumed in oil refining and industrial processes, the applications that have used hydrogen for decades, rather than in newer energy uses such as power generation, heating or transport fuel.
Why does it matter whether hydrogen is measured in tonnes or megawatt-hours?
The unit shapes the comparison. Tonnes present hydrogen as an industrial chemical competing against existing hydrogen supply. Megawatt-hours present it as part of the energy system, inviting comparison with electricity and gas markets and implying far larger addressable demand than the buyers who currently purchase hydrogen represent.
Who actually buys hydrogen today?
Refineries use it for hydrotreating and hydrocracking, and chemical producers use it to make ammonia and methanol. These buyers purchase a molecule to a contracted purity specification, delivered continuously to a fixed site, and they compare its price against hydrogen they can already produce themselves from natural gas.
Can electricity replace hydrogen in ammonia production?
Not directly. An ammonia plant buys a chemical: the synthesis reaction requires hydrogen as a molecule to combine with nitrogen. Electricity can be used to make that hydrogen, for example through electrolysis, but it cannot substitute for the hydrogen itself inside the process.
What is the realistic near-term market for low-carbon hydrogen?
Substitution inside existing refineries and chemical plants, where demand is already metered, contracted and located. That target is smaller and more commercially demanding than broad energy-transition projections imply, but the customers exist today and their volumes are known, which makes offtake far easier to underwrite.
How were US equity markets trading when this argument was published?
As of the last trade at 16:35 GMT on 25 August 2026, the S&P 500 tracker SPY was at $765.77, up 0.30%. The Nasdaq 100 proxy QQQ stood at $711.06, up 0.67%, and the Dow tracker DIA was at $534.56, up 0.17% on the day.
Sources
Photo: adel bouzid · Pexels Licence — source
