Research: Clean Hydrogen in the EU Mostly Exists Only on ‘Paper’

Clean hydrogen is essential for achieving global climate goals, but the EU has yet to move beyond the stage of ambitious plans, a study has shown. By the end of the decade, the EU is expected to produce 10 million tons of green hydrogen and import another 10 million tons, according to plans from 2020.

Green hydrogen should be produced through electrolysis, using electricity from renewable sources. For European hydrogen production to reach the set target, 120 gigawatts of electrolysis capacity needs to be built, warned the consulting firm PwC Strategy in a study published on Monday.

The EU would need to build electrolyzers with a capacity of 20 gigawatts annually, they calculated.

Currently, only 200 megawatts are operational, and three-gigawatt plants are still in the construction or financing phase.

The gap between plans and their realization is deep worldwide, the study states. Projects totaling 840 gigawatts have been announced, but only one gigawatt of capacity is operational, while 15 gigawatts are in the financing or construction phase.

Europe ranks first in plans, ahead of Africa and Latin America. However, China, South Korea, and Japan lead in project realization. The Asian trio already has “twice the production capacity operational or in the financing and construction phase compared to Europe,” emphasized PwC.

The United States has focused on cheaper hydrogen, produced with carbon dioxide capture and storage.

– The capital-intensive hydrogen market is still in its infancy, and recently it has faced high interest rates and rising material costs – said co-author Dirk Niemeier.

The ball is in the court of politics, Niemeier emphasizes.

– The biggest obstacle is the lack of large procurement contracts, which hinders financing and thus the completion of production projects. Subsidies that will offset higher initial costs compared to fossil alternatives, similar to electricity from renewable sources, are a prerequisite for such procurement contracts – explain the authors of the study.

The insufficient supply of electricity from renewable sources is also noted as a problem.