Deep dive: hydrogen & e‑fuels — fastest‑moving subsegments to watch (emerging markets)

the fastest‑moving subsegments to watch. Focus on emerging markets’ hydrogen and e‑fuels, including the leading sectors and metrics that matter.

Executive Summary

Emerging markets are rapidly positioning themselves at the centre of the hydrogen and synthetic fuels transition. Abundant renewable resources, supportive policies and growing export ambitions have led to a pipeline of multi‑gigawatt projects from Latin America to Africa and the Middle East. Chile’s HIF Haru Oni demonstration plant proved that wind‑powered electrolysis can produce carbon‑neutral fuels at scale: its 3.4 MW wind turbine and 1.2 MW electrolyser produce green hydrogen that is synthesised with captured CO₂ to make around 130 thousand litres of e‑gasoline per year. The next phase will deploy 325 MW of wind capacity and 240 MW of electrolysers to scale production to 66 million litres annually. In Namibia, the Hyphen project will use 5 GW of wind and solar with 3 GW of electrolysers to produce roughly 300 kilotonnes of green hydrogen and 1.7 million tonnes of ammonia per year. Oman’s Hyport Duqm plans a 500 MW electrolyser powered by 1.3 GW of renewables to produce 60 000 tonnes of hydrogen and 330 000 tonnes of ammonia annually, while SalalaH2 will generate 1 000 tonnes per day of green ammonia using 1 GW of wind and solar and a 400 MW electrolyser. Saudi Arabia’s Neom complex is nearing completion; its 2.2 GW electrolyser and 4 GW solar‑wind plant will deliver about 600 tonnes of hydrogen per day and 1.2 million tonnes of ammonia each year from 2027. India targets 5 million tonnes of green hydrogen by 2030, requiring 125 GW of additional renewable capacity, but as of mid‑2025 only 2.8 % of the 11.9 million tonne project pipeline was operational. These examples illustrate both momentum and bottlenecks in emerging markets.

Key takeaways

• Resource advantages unlock competitive e‑fuels: Many emerging markets enjoy exceptional wind and solar resources. In Chile’s Magallanes region, the wind capacity factor can reach 70%, providing continuous renewable power for electrolysers and enabling electricity costs below USD 20/MWh. Similar conditions in Namibia and Oman underpin large‑scale ammonia projects. These low‑cost resources could make emerging‑market e‑fuels cost‑competitive with fossil fuels once electrolyser costs decline.
• Mega‑projects are scaling quickly: The Hyphen project in Namibia aims to produce 1.7 Mt of green ammonia using 5 GW of renewables and 3 GW of electrolysers. Oman’s Hyport Duqm and SalalaH2 projects will together add nearly 1.23 million tonnes of green ammonia capacity. Saudi Arabia’s Neom complex will deliver 600 t/d of hydrogen and 1.2 Mt/y of ammonia once operational. These projects dwarf the 1.2 MW electrolyser at Haru Oni and demonstrate how quickly emerging markets are scaling up.
• Offtake and financing remain hurdles: India has announced 158 green hydrogen projects totalling 11.9 Mt of capacity, yet 94 % of this capacity remains at the announcement stage and just 0.1 % is under construction. Globally, only a small fraction of planned capacity has secured off‑takers, delaying final investment decisions. Long‑term purchase agreements – such as Air Products’ 30‑year offtake from the Neom project – will be critical to unlocking capital.
• Diversification of end uses: While Europe leads in e‑kerosene, emerging markets are focusing on e‑methanol and green ammonia for export to Asia and Europe, as well as domestic uses in fertiliser, steel and power generation. HIF’s planned 800 000 t/y e‑methanol facility in Brazil signals expansion beyond pilot scale.
• Policy leadership is essential: Governments in Namibia, Oman and India are providing land, regulatory frameworks and hydrogen strategies to de‑risk projects. Clear policies on emissions accounting and purchase obligations will determine whether announced capacity becomes reality.

Why It Matters

Hydrogen and its derivatives offer one of the few viable pathways to decarbonise hard‑to‑abate sectors such as fertilisers, steel, shipping and aviation. Emerging markets possess vast untapped renewable resources and the potential to become major exporters of green molecules. By harnessing their wind, solar and geothermal endowments, these regions can stimulate economic development, create tens of thousands of jobs and capture new industrial value chains. For example, Namibia’s Hyphen project expects to create around 15 000 construction jobs and employ 3 000 people permanently. Chile’s Haru Oni demonstration attracted over 2 900 visitors and employed 250 workers during construction. Large‑scale hydrogen exports could also bolster energy security for regions that currently import fossil fuels, diversify revenue bases and reduce exposure to volatile oil markets.

Emerging markets have distinct advantages over developed regions. Land availability is less constrained, permitting processes can be streamlined and local communities stand to benefit from infrastructure investment. With the right policies and partnerships, countries like Namibia, Oman and Chile could leapfrog to become global leaders in e‑fuel production, supplying Europe and Asia with carbon‑neutral ammonia and methanol. Conversely, if investment and policy momentum stall, these regions risk missing out on a generational opportunity and remaining tied to fossil‑fuel exports.

Key Concepts and Market Fundamentals

Colours and derivatives of hydrogen

Clean hydrogen is produced via electrolysis using renewable power (“green”) or from natural gas with carbon capture (“blue”). Hydrogen can be converted into derivatives such as ammonia (NH₃), methanol (CH₃OH) and synthetic gasoline or kerosene by combining it with nitrogen or carbon dioxide. These e‑fuels are easier to store and transport than compressed hydrogen and can be used directly in existing ships, power plants and industrial processes. For instance, HIF’s e‑gasoline can be blended into conventional gasoline and used in internal combustion engines. Ammonia and methanol are globally traded chemicals with established storage and shipping infrastructure, making them attractive export commodities.

Drivers of competitiveness

Four main factors determine the competitiveness of hydrogen and e‑fuel projects in emerging markets:

1. Renewable resource quality: High capacity factors reduce the cost of renewable electricity, which is the largest component of green hydrogen costs. The Magallanes region’s wind capacity factor of up to 70 % keeps HIF’s electricity costs below USD 20/MWh. Namibia and Oman enjoy similarly strong solar and wind resources. Projects in regions with low capacity factors will struggle to compete.
2. Electrolyser cost and scale: Large‑scale projects reduce unit costs by spreading fixed costs across more output. Hyphen’s 3 GW electrolyser and Neom’s 2.2 GW plant illustrate how economies of scale are being pursued. Emerging markets often import electrolysers, so local manufacturing or partnerships with global suppliers can influence cost.
3. Access to capital and offtakers: Final investment decisions hinge on long‑term purchase agreements and supportive financing. Air Products’ 30‑year offtake contract for Neom’s output provides revenue certainty. In contrast, India’s announced projects lack committed buyers and remain mostly on paper.
4. Infrastructure and logistics: Producing e‑fuels at scale requires desalination plants, pipelines, storage tanks, ports and transmission lines. Hyphen will develop a common user infrastructure including desalination, pipelines, transmission and storage, enabling other projects to piggyback on its investment.

Policy and market context

Governments are formulating national hydrogen strategies and tendering land parcels to attract investors. Namibia’s Southern Corridor Development Initiative aims to develop up to 15 million tonnes per year of green hydrogen capacity and has established a Green Hydrogen Council to oversee projects. Oman’s Green Hydrogen Strategy earmarks 50 000 km² of land for renewable projects, targeting up to 25 Mt per year by 2050 and expecting to install 300 million solar panels and 10 000 wind turbines. India’s National Green Hydrogen Mission pledges USD 90 billion to achieve 5 Mt of green hydrogen by 2030, yet implementation lags because project developers await clear demand signals and purchase obligations. Certification and emissions accounting frameworks (e.g., EU RFNBO standards) are also critical, as they determine access to premium markets.

What’s Working

Several emerging‑market initiatives demonstrate progress and innovation in hydrogen and e‑fuels:

1. Pilot projects proving the concept: Haru Oni in Chile is the world’s first operating e‑fuels facility. Its demonstration plant combines a 3.4 MW wind turbine with a 1.2 MW electrolyser and produces around 130 000 L of e‑gasoline per year. The project has exported its first batches to Porsche and plans to scale to 66 million L using 325 MW of wind and 240 MW of electrolysers. HIF’s facility has also installed a direct air capture unit, pioneering the integration of CO₂ capture in e‑fuel production.
2. Mega‑scale green ammonia projects: Namibia’s Hyphen project will integrate 5 GW of wind and solar with 3 GW of electrolysers to produce about 300 ktonnes of hydrogen and 1.7 Mt of green ammonia per year. The first phase, costing USD 4.5 billion, aims for commercial production in 2026. The project will create 15 000 construction jobs and 3 000 permanent roles, highlighting socio‑economic benefits.
3. Integrated energy hubs: Oman’s Hyport Duqm will deploy 1.3 GW of renewables and a 500 MW electrolyser to produce 60 000 t of hydrogen (330 000 t ammonia) each year. SalalaH2, a consortium including OQ, Marubeni and Linde, plans to produce 1 000 t/day of green ammonia using 1 GW of wind and solar and a 400 MW electrolyser. ACME’s Port of Duqm project will use 3 GW of solar and 500 MW of wind to make about 900 000 t of ammonia annually.
4. Game‑changing Middle Eastern investments: Saudi Arabia’s Neom Green Hydrogen Company will deploy a 2.2 GW electrolyser powered by about 4 GW of solar and wind. The project will produce roughly 600 t of hydrogen per day (converted to 1.2 Mt of ammonia) and has secured a 30‑year offtake agreement with Air Products. Construction is over 90 % complete and deliveries are expected from 2027. Plans for a second project in Yanbu with up to 4.4 GW of electrolysers indicate continued momentum.
5. New e‑methanol ventures: In April 2025, HIF Global announced its first Brazilian project – an e‑methanol plant expected to produce up to 800 000 t per year using green hydrogen. This facility will be located at the Açu port, which is developing a hydrogen hub, demonstrating how emerging markets are branching into methanol and diversifying beyond ammonia.

What Isn’t Working

Despite these successes, emerging markets face significant challenges:

1. Capital intensity and offtake risk: Projects such as Hyphen (USD 10 billion) and Neom (USD 8.4 billion) require massive upfront investment. Without long‑term purchase agreements, few investors will commit. India’s experience illustrates the problem: by August 2025, 158 green hydrogen projects had been announced, but 94 % of the capacity remained at the announcement stage and only 0.1 % was under construction.
2. Infrastructure and water constraints: Electrolytic hydrogen production requires large amounts of water and energy. Hyphen will include a desalination plant and pipelines, but many locations lack such infrastructure. Projects in arid regions must balance water use with local needs and invest in desalination.
3. Policy and regulatory uncertainty: While several countries have issued hydrogen strategies, detailed regulations and standards for certification, emissions accounting and export are still evolving. Without clear definitions of “green” and mandatory purchase obligations, developers struggle to secure offtake. India’s National Green Hydrogen Mission sets production targets but does not mandate buyers.
4. Supply‑chain and manufacturing gaps: Emerging markets often rely on imported electrolysers and equipment. This exposes projects to supply‑chain risks and foreign exchange volatility. Local manufacturing initiatives are still nascent.
5. Environmental and social impacts: Mega‑projects require large land areas and may affect local ecosystems and communities. Ensuring inclusive development, consent and benefit sharing is essential to avoid opposition.

A Quick Framework for Sustainability Leads

To evaluate emerging‑market hydrogen and e‑fuel opportunities, sustainability leads can follow this framework:

1. Assess resource quality and infrastructure: Evaluate wind and solar potential, land availability and water sources. Projects in regions with high capacity factors and existing port infrastructure are more competitive.
2. Review policy landscape and incentives: Analyse national strategies, tax incentives, land tendering processes and export regulations. Countries with clear roadmaps (e.g., Namibia’s Green Hydrogen Council and Oman’s Green Hydrogen Strategy) provide more certainty.
3. Evaluate partner alignment and offtake: Identify credible partners along the value chain, including project developers, renewable energy suppliers, equipment manufacturers and offtakers. Long‑term purchase agreements underpin bankability. Look for projects with anchor customers in power, fertiliser or transportation sectors.
4. Measure socio‑economic impact: Consider job creation, local procurement and skills development. Projects like Hyphen that create tens of thousands of jobs and include training programmes can build community support.
5. Plan for modular scaling and flexibility: Start with pilot or demonstration phases (as HIF did with a 1.2 MW electrolyser) and design infrastructure that can be expanded in phases. Ensure that hydrogen or ammonia can be diverted to multiple end uses (e.g., fertiliser, power, maritime fuel) to reduce offtake risk.
6. Incorporate MRV and certification from the start: Implement measurement, reporting and verification systems and pursue certifications such as RFNBO or ISCC to access premium markets. Traceability from renewable power generation to final fuel consumption will be increasingly required.

Fast‑Moving Segments to Watch

• Gigawatt‑scale ammonia hubs: Multi‑gigawatt hydrogen‑to‑ammonia projects like Hyphen (Namibia), Hyport Duqm (Oman) and Neom (Saudi Arabia) are setting new benchmarks. Their success will influence investor confidence and accelerate replication.
• E‑methanol expansion: Latin America and China are investing in e‑methanol for maritime transport and chemicals. HIF’s Brazilian project will produce 800 000 t per year, adding to planned capacity in Chile.
• Hydrogen valleys and integrated infrastructure: Initiatives like Namibia’s Southern Corridor Development Initiative and Oman’s common user infrastructure show how governments can provide shared desalination, pipelines and export terminals. Such hubs will reduce costs and catalyse multiple projects.
• Policy innovation: Emerging policies include land auctions for renewable‑hydrogen projects, green hydrogen standards and carbon‑intensity mandates for imports. Tracking policy progress in India, Oman, Namibia and others will indicate which markets will scale first.
• Industrial demand pivots: Fertiliser producers, steel mills and power plants in emerging markets are starting to sign green hydrogen offtake agreements. The speed at which these sectors adopt will determine local demand and export potential.

Checklist for Sustainability Leads

• ☐ Map resource potential – assess wind, solar and water availability; prioritise sites with high capacity factors and access to ports.
• ☐ Understand policy incentives – review national hydrogen strategies, land tendering processes and tax incentives; engage with government agencies.
• ☐ Identify strategic partners – secure long‑term offtake agreements with power companies, fertiliser producers or industrial customers; choose experienced project developers and equipment suppliers.
• ☐ Evaluate socio‑economic benefits – quantify job creation, local procurement and skills training; build community support.
• ☐ Plan scalable project phases – start with pilot units (e.g., 1–10 MW) and design infrastructure to scale to hundreds or thousands of megawatts over time.
• ☐ Secure financing and risk mitigation – explore blended finance, export credit agencies and multilateral support; ensure robust offtake and hedging strategies.
• ☐ Embed MRV and certification – implement digital tracking for renewable input, electrolyser operation and product output to meet RFNBO or other standards.
• ☐ Address environmental and social impacts – conduct environmental assessments, involve local communities and ensure fair land use.

FAQ

What makes emerging markets attractive for hydrogen and e‑fuels? Many emerging markets possess abundant renewable resources, affordable land and supportive governments. High wind and solar capacity factors (70 % in Chile’s Magallanes region) and low electricity costs (below USD 20/MWh) can deliver competitive green hydrogen. Additionally, export‑oriented economies like Namibia and Oman are keen to diversify beyond fossil fuels and capture value in new supply chains.

How do mega‑projects manage water requirements? Electrolysis consumes significant water, often requiring desalination. Projects like Hyphen include desalination plants, pipelines and storage as part of a common user infrastructure. Water sustainability assessments and community engagement are critical for project approval.

Why are off‑take agreements so important? Hydrogen and e‑fuel plants require billions of dollars in capital. Without guaranteed buyers, banks and investors are hesitant to finance projects. The Neom project secured a 30‑year offtake contract with Air Products, providing the revenue certainty needed for financial close. In contrast, India’s projects lack committed buyers, slowing progress.

Are e‑fuels commercially competitive? Today, e‑fuels cost more than fossil fuels, but the gap is narrowing as renewable power and electrolyser prices fall. Large‑scale projects benefit from economies of scale and cheap renewable resources. Projects in regions with high capacity factors and favourable policies aim to produce e‑fuels at or below the price of imported fossil fuels, especially when carbon taxes or border adjustments are considered.

How can companies participate in the emerging value chain? Opportunities span project development, renewable energy supply, electrolyser manufacturing, carbon capture, synthetic fuel synthesis, storage, logistics, certification and finance. Sustainability leads should map where their organisations can contribute and build partnerships accordingly.

Sources

• HIF Global. (2025). Haru Oni E-Fuels Project Technical Overview. HIF Global.
• Hyphen Hydrogen Energy. (2025). Namibia Green Hydrogen Project Development Report. Hyphen Hydrogen Energy.
• Hyport Duqm. (2025). Oman Green Hydrogen and Ammonia Project Summary. Hyport Duqm.
• SalalaH2 Consortium. (2025). Green Ammonia Production Project Overview. SalalaH2.
• ACME Group. (2025). Duqm Green Ammonia Facility Project Brief. ACME Group.
• NEOM Green Hydrogen Company. (2025). Saudi Arabia Hydrogen Project Update. NEOM.
• Government of India. (2025). National Green Hydrogen Mission Progress Report. Ministry of New and Renewable Energy.