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21 Jan 2025

Hydrogen Market Databook 2025: Western Europe, part 1

The EU released its hydrogen strategy in 2020. The plan—a pathway to help reach the region’s net-zero ambitions—called for both green hydrogen production and imports into the bloc to reach 10mt/yr by 2030. The plan focused on five areas: investment support, supporting production and demand, creating a hydrogen market and infrastructure, research and cooperation, and international cooperation.

According to the European Commission’s hydrogen strategy and REPowerEU, the EU will conduct a phased approach to implementing hydrogen infrastructure and production to 2050:

Phase 1 (2020–24)

Goals during this period included installing 6GW of renewable hydrogen electrolysers to produce up to 1mt/yr of green hydrogen, decarbonising existing hydrogen production (approximately 96% of the EU’s hydrogen consumption is from fossil fuels), increasing the use of green hydrogen in industrial processes and heavy-duty transport, scaling up electrolyser manufacturing, and laying the foundation for a European hydrogen regulatory framework, among other items.

This first phase also includes the creation of various organisations/associations, initiatives and funding programmes to help jumpstart hydrogen projects, as well as entice foreign investors to invest in Europe’s hydrogen value chain. These programmes included the European Clean Hydrogen Alliance, REPowerEU, Important Projects of Common European Interest (IPCEI), InvestEU, the ETS Innovation Fund, the Hydrogen Energy Network (HyNet), the European Hydrogen Bank, and others.

At the time of publication, the EU—under the IPCEI designation—had awarded more than 120 hydrogen projects with funding, amounting to nearly €19b ($19.68) in state aid. The projects fall under the IPCEI initiatives of Hy2Tech, Hy2Use, Hy2Infra and Hy2Move, which promote the production, transmission, distribution, research and storage of green hydrogen in the EU. Along with state aid, these projects have resulted in more than €24m in capital investment announcements in the region.

Phase 2 (2025–30)

The primary goal of Phase 2 is to increase installed hydrogen electrolyser capacity to 40GW to produce up to 10mt/yr of green hydrogen. The increased renewable hydrogen capacity will hopefully drive down green hydrogen production costs and make it price competitive against other forms of hydrogen production (e.g., via fossil fuels). Phase 2 also includes the ramp-up of green hydrogen’s use in steelmaking, long-haul trucks, rail, maritime vessels, electricity/power generation and other sectors of the EU economy. This phase will also include the development of hydrogen valleys, hydrogen fuelling networks throughout the region, storage, and additional cross-border collaboration and trade.

According to the EU’s hydrogen strategy, investment in electrolysers could reach €24–42b by 2030. In turn, an additional €220–340b would need to be invested to connect 80–120GW of renewables production capacity to electrolysers. Approximately €11b of investments are needed to incorporate CCS into existing plants, and around €65b will be needed to develop hydrogen transport, distribution, storage and fuelling stations/infrastructure.

Phase 2 also calls for the introduction of synthetic aviation fuels (SAF) into the EU’s aviation sector. SAF is derived from renewable hydrogen and/or captured carbon (also referred to as e-kerosene), according to the Commission. This initiative—ReFuel EU Aviation—is part of the Commission’s ‘Fit for 55’ package to reduce emissions by 55% by 2030. Although the aviation directive primarily concerns the adoption of SAF in EU airports, the initiative calls for 1.2% (approximately 600,000t/yr) of aviation fuel at EU airports to be derived from renewable hydrogen. According to the European non-profit Transport & Environment, there are 45 active e-kerosene projects under development (25 industrial-scale projects and 20 pilot projects) in the EU, representing more than 1.7mt/yr of e-kerosene production by 2030.

However, none of the major e-kerosene projects had taken FID at the time of publication. Coupled with that, many airlines are reluctant to purchase aviation fuel derived from green hydrogen due to cost.

Phase 3 (2030–50)

Hydrogen technologies reach maturity in this stage, as well as a significant buildup in renewable energy capacity—approximately 25% of renewable energy might be used for green hydrogen production by 2050. The EU forecasts that approximately €180–€470b in additional investments are needed in green hydrogen production capacity within this phase. Phase 3 also calls for increased penetration of green hydrogen into various sectors of the EU economy, including transportation (rolling out an additional 400 small-scale hydrogen fuelling stations could require additional investments of between €850b and €1t), aviation and marine industries, industrial and commercial buildings.

The GEI database is tracking nearly 680 active hydrogen projects in Western Europe. The region accounts for nearly half of the total market share in active hydrogen projects globally. Within the region, most active projects are in seven countries: the UK, Germany, Spain, the Netherlands, France, Norway and Italy. Collectively, these seven countries represent 80% of active hydrogen projects in the region, with the remaining percentages broken up by various Western European nations (see Fig.1).

Lastly, to move vast amounts of hydrogen around the EU, an intricate supply network is needed in the region. To supply demand centres with hydrogen, the European Hydrogen Backbone (EHB) initiative has been implemented (see Fig.2). This capital-intensive programme includes more than 30 energy infrastructure operators across northern, central and southern Europe.

By 2040, the EHB is expected to traverse approximately 53,000km at a total cost of €80–143b. This includes onshore and offshore pipelines to deliver hydrogen to various demand centres in the EU for domestic/regional use. According to the EHB’s November 2023 update, more than 31,000km of hydrogen pipelines are expected to be commissioned by 2032, with the bulk (more than 19,400km) planned for completion in 2030.

The following are notable hydrogen projects and initiatives in Western Europe.

France

The country released its National Hydrogen Strategy in September 2020. When released, the plan called for 6.5GW of installed electrolyser capacity by 2030, generating approximately 680,000t/yr of low-carbon hydrogen. The strategy also provided a pathway for the adoption of green hydrogen into various sectors of the French economy, including power generation and heavy and commercial transportation, among others. The EU and French governments backed this strategy with €9b of public funding to jumpstart the nation’s domestic green hydrogen ambitions.

At the time of this publication, the GEI database was tracking 45 active hydrogen projects in France, representing 7% of Western Europe’s active hydrogen project market share. Some of the country’s more notable projects include:

The €2.2b GravitHy project will utilise green hydrogen to decarbonise steel production.
The HyGreen Provence project will use green hydrogen to decarbonise the region’s mobility sector, as well as for power generation as well as heating and cooling.
H2V’s €910m green hydrogen and e-methanol complex in Fos-sur-Mer. The company has also partnered with Hy2Gen to develop e-SAF to decarbonise France’s aviation industry, as well as plans to build a few additional green hydrogen facilities (e.g., the H2V 59 project, the Normandy hydrogen production plant and the Meyreuil project, among others).
The €780m Emil’Hy project will convert a coal-fired power station to a 400MW green hydrogen production facility. The green hydrogen will be pumped into the MosaHYc pipeline for industrial use.
The VHyGO hydrogen valley initiative to increase green hydrogen production in Western France. Companies such as Lyhfe have already commenced operations on green hydrogen production in the area, which will be used to decarbonise industry and transportation (e.g., the creation of hydrogen filling stations). Another hub project is in the Loiret region. Called H2Hub Loiret, the project includes the construction of a green hydrogen production facility and a minimum of three hydrogen fuelling stations. Lhyfe will also provide green hydrogen to HYmpulsion’s Zero Emission Valley project in the Auvergne-Rhone-Alpes region, the Hy’Touraine project, the Green Coast project, to produce e-methanol to decarbonise the maritime sector and to Ugitech’s industrial site in Savoie to decarbonise the stainless-steel–maker’s operations and provide green hydrogen to the area’s transportation sector.
FertigHY’s €1.3b low-carbon, nitrogen-based fertiliser plant (feedstock will come from renewable hydrogen) that will produce 500,000t/yr of fertiliser once operational in 2030. The plant’s production represents approximately 10% of France’s agricultural production sector consumption.
Air Liquide’s €400m Normand’Hy 200MW electrolyser project. The company is also building a renewable and low-carbon hydrogen unit to supply TotalEnergies’ €500m Grandpuits zero-crude platform initiative. TotalEnergies plans to use green hydrogen to decarbonise its refineries in Europe. TotalEnergies is also working with France’s Engie on the Masshylia mega-project, which could produce as much as 50t/d of green hydrogen once operational in 2026. Engie is investing heavily in new green hydrogen pathways globally, as well, including pilot projects and full-scale production facilities such as the more than €500m Reuse project in Dunkirk to produce synthetic fuels for marine vessels and the aviation sector. However, the company mentioned in Q1 2024 that it was delaying plans to develop approximately 4GW of green hydrogen projects. Engie originally planned to commission these projects by 2030 but has pushed back the rollout to 2035.
Other green hydrogen production projects include GH2’s 300MW Ambes project in Bordeaux, the Chemours Co.’s green hydrogen plant in Villers-Saint Paul and Hyd’Occ’s €60m green hydrogen plant in Port-la Nouvelle.

Germany

The German government has vowed to be carbon-neutral by 2045. To reach this goal, the government plans to significantly boost both the domestic use and production capacity of hydrogen. In 2023, the government updated its hydrogen strategy, aiming to boost domestic hydrogen consumption from 55TWh/yr in 2023 to 90–130TWh/yr in by 2030 and up to 350TWh/yr by 2045. The strategy focuses on several objectives, including increasing green hydrogen production capacity, developing a regulatory framework to expand the country’s hydrogen transport and distribution infrastructure, strengthening Germany’s competitiveness in hydrogen technologies and research, and increase international partnerships—Germany will need to import approximately 50–70% of its hydrogen to adhere to domestic consumption forecasts, the government say.s

Germany’s hydrogen strategy is divided into eight areas of development:

Hydrogen production: The goal is to not only increase domestic green hydrogen production capacity but also to scale-up electrolyser capacity to make producing green hydrogen cost competitive against other forms of hydrogen production (e.g., via fossil fuels). The government aims to have 10GW of domestic electrolyser capacity operational by 2030. However, to provide sufficient feedstock for electrolysers, Germany must ramp up renewable energy production, as well.
Transport: Hydrogen is well-suited to decarbonise Germany’s mobility sector, especially for large, long-haul vehicles, marine vessels and aviation. This includes using hydrogen fuel cells in vehicles and/or producing efuels via green hydrogen pathways.
Industrial sector: The German government plans to promote the switchover from fossil fuels to green or blue hydrogen and/or other low-greenhouse-gas (GHG) or GHG-neutral processes in the domestic industrial sector, such as in the chemicals, petrochemicals, refining and steel industries. The German government plans to set up various funding mechanisms and incentives to jumpstart this initiative. For example, it announced in early 2024 $17b in subsidies to convert natural gas-fired power plants to hydrogen.
Heat: This scheme focuses on utilising efficient fuel cells to provide heat in the building sector.
Infrastructure/supply: Green hydrogen is not useful unless it can be moved to demand centres. The German government is exploring ways to distribute hydrogen across the country (e.g., the Hydrogen Core Network project). This includes repurposing existing infrastructure such as natural gas pipelines for hydrogen use (Germany is targeting the development of more than 6,000 miles of hydrogen pipelines), as well as building a network of hydrogen fuelling stations for road transport, hydrogen rail networks and waterways.
Research, education and innovation: Several research funding initiatives have been instituted to help increase research and development of new hydrogen production technologies to build a more efficient German green hydrogen value chain. This initiative is complemented by H2Giga (the mass production of electrolysers), H2Mare (producing green hydrogen offshore using offshore wind power) and TransHyDE (technologies for transporting hydrogen), as well as the Kopernikus projects: ENSURE (transitioning the German power grid), P2X (boosting the production of efuels), SynErgie (matching domestic electricity demand to supply) and Ariadne (open discussion with various stakeholders, policymakers and the public on Germany’s energy transition).
Action at the European level: This area is focused on implementing EU hydrogen initiatives, as well as creating hydrogen standards in Germany and the EU (e.g., proof of origin for electricity from renewable energy).
International hydrogen market and external economic partnerships: To reach its hydrogen goals, Germany will have to rely on imports to cover a sizeable portion of domestic demand. Therefore, the nation is working with different international entities to build partnerships and secure viable and reliable hydrogen supplies. In early 2024, the German government announced it would earmark more than €3.5b to procure green hydrogen from international suppliers.

According to the German government, the funds will be used to help compensate the differences in hydrogen supply and demand prices.

Germany is behind only the UK in terms of active hydrogen project market share. At the time of publication: the GEI database was tracking more than 110 active hydrogen projects in Germany. Several of these projects have also been awarded EC funding under the IPCEI designation. For example, the Commission awarded 24 German hydrogen projects funding under Wave 3 of the IPCEI (Hy2Infra, or the infrastructure wave). This opens more than €4.6b in funding for these projects. When adding company investments, these projects represent approximately €8b in total capex.

Additional projects in Germany include various plants for green or blue hydrogen production, hydrogen imports (green ammonia cracking facilities) and pipeline infrastructure, efuel production plants, hydrogen fuelling stations, hydrogen combined-cycle power plants, hydrogen storage and hydrogen hubs and valleys, among others.

Lee Nichols is Vice-president, content, at Gulf Energy Information.