Q0080
The strongest near-term demand is in existing uses: refining, ammonia and methanol, with Malaysia especially important in regional methanol demand. Further opportunities include fertilisers, shipping fuels and selected industrial feedstocks; steel is more relevant initially in larger regional steel markets. Aviation fuels, heavy transport and power generation may grow later, but need stronger policy, infrastructure and cost evidence.
Large hydrogen projects need durable demand, not expressions of interest. Prioritising sectors that already consume hydrogen or can use a derivative directly lowers technology and infrastructure risk, while focusing support on applications with few practical decarbonisation alternatives prevents scarce low-emissions hydrogen from being diverted to uses better served by direct electrification.
The IEA reports that Southeast Asian hydrogen demand is concentrated in ammonia, refining and methanol. Malaysia accounts for a substantial regional share and is particularly important in methanol. Converting these established users can create scale without waiting for new equipment at the point of use.
Low-emissions hydrogen can replace fossil-derived feedstock in ammonia production. Competitiveness depends on gas and electricity prices, plant integration, fertiliser markets, carbon policy and whether customers pay for lower-emissions products.
Malaysia's existing methanol activity provides production knowledge and potential anchor demand. Low-emissions methanol may serve chemical and shipping markets, but it also needs a credible low-emissions carbon source and recognised lifecycle accounting.
Ammonia, methanol and synthetic fuels could serve international shipping, while synthetic aviation fuel can be supplied through a small number of airports. These markets depend heavily on international standards, fuel mandates, vessel or aircraft compatibility, safety and willingness to pay.
Hydrogen-based direct reduced iron could matter where suitable ore, renewable power, gas, infrastructure and steel demand align. Indonesia and Vietnam have stronger near-term regional industrial foundations than Malaysia, though Malaysia could participate through equipment, trade or low-emissions materials.
Fuel-cell trucks may suit high-utilisation routes where payload, range and fast refuelling justify infrastructure. Passenger cars and many stationary uses face strong battery or direct-electric alternatives. Hydrogen-to-power can offer firm or long-duration value, but conversion losses and fuel cost make routine generation difficult to justify.
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