Wood Mackenzie: Can Natural Hydrogen Deliver on Its Promise?

A new report from Wood Mackenzie examines whether natural hydrogen can realistically become a meaningful part of the global energy mix, and what still needs to happen for that to occur. 

The key takeaway: the opportunity is real, but far from proven. 

The hydrogen sector struggled in 2025, with project cancellations rising and investment decisions dropping sharply—largely due to cost challenges, not demand. Natural hydrogen stands out because it could bypass expensive production processes, offering a potentially cheaper, “ready-made” energy source. 

However, the industry is still in its infancy. Exploration is only now moving from theory to drilling, with the U.S. leading activity, followed by Australia, Canada, and France. Across the sector, about 60 projects have been announced, but most remain early-stage. 

From an industry standpoint, natural hydrogen aligns closely with oil and gas exploration skillsets, but major energy companies are still on the sidelines, waiting for proof of concept before committing capital. 

Regulation is another bottleneck. Countries with clearer frameworks (like the U.S. and Australia) are seeing more activity, while others lag due to uncertain subsurface rights and policy gaps. 

Looking ahead, Wood Mackenzie does not yet include natural hydrogen in its base-case supply outlook. Still, if exploration proves successful, the sector could reach ~20 million tonnes per year by 2050, or about 12% of global low-carbon hydrogen supply.

Find the full report here.