Global investment low-carbon hydrogen has more than tripled in 2022 to a record $1.2 billion, according to a report released on Thursday by research firm BNEF.

The investments cover electrolysis and thermochemical production projects, as well as pipelines and underground storage, Kallanish notes. Yet, 99% of last year’s spending went towards electrolysers, with electrolysis capacity surging to 1.2 gigawatts from less than 0.5 GW in 2021.

Although Europe is believed to be at the forefront of hydrogen technology and development, investment in the region was behind the levels registered in the US and China. The former topped electrolyser spending, with the commissioning of 290 megawatts of electrolysis capacity. China commissioned 724 MW of additional capacity last year, but investment was lower than the US’s because Chinese electrolysers are roughly 70% cheaper than those sold elsewhere.

BNEF researchers suggest Europe’s low investment levels are mostly due to project delays, as investors waited for more clarity over hydrogen standards and subsidies. It’s unclear whether the US’s Inflation Reduction Act legislation, which offers up to $3 in tax credits per kilogram of green hydrogen production in the country, has negatively impacted European investment in 2022.

Hydrogen had the highest growth in investment among energy transition sectors, but only accounted for 0.1% of the $1.1 trillion spent in other areas including renewables and electrified transport. The latter, which covers spending on EVs and associated infrastructure, increased 54% year-on-year to $468 billion.