According to Reuters, several European countries—as well as key industrial players—are scaling back their ambitions for green hydrogen. The main reason? The price remains too high compared to fossil fuels, which is bad news for the climate.
Hydrogen is seen as a promising solution for decarbonising hard-to-abate sectors such as steel. But ArcelorMittal has decided to abandon its hydrogen plans at its Dunkirk site. The decision was confirmed by Alain Le Grix de la Salle, head of the French subsidiary, during a hearing before the National Assembly’s Finance Committee on 9 July. He cited excessive costs as the primary obstacle.
“The gap between ambition and reality in Europe highlights the extent of the readjustment currently taking place in the industry,” said Jun Sasamura, hydrogen lead at consulting firm Westwood Global Energy.
According to Westwood, only around 20% of the hydrogen projects currently planned in the EU are likely to materialise by the end of the decade. That would amount to around 12 GW of production capacity—far short of the EU’s 40 GW target.
France is not alone in revising its targets. Similar slowdowns can be seen in Italy and the Netherlands.
A Lack of Buyers in Spain and Portugal
Even more concerning are the signs of hesitation coming from southern Europe. “Green hydrogen has gone from overhyped to a valley of disillusionment,” said Miguel Stilwell d’Andrade, CEO of Portuguese energy group EDP. “What’s missing is demand. There’s €400 million in hydrogen subsidies available in Spain and Portugal—but we need buyers.”
In Spain, Iberdrola has suspended plans to expand its green hydrogen plant, which currently houses a 20 MW electrolyser. The issue is the same: the company must secure off-takers before increasing output.
Yet the sector is not giving up. Gas network operator Enagás has announced plans to build a 2,600 km hydrogen pipeline network, which will connect to the wider trans-European H2Med corridor. According to CEO Arturo Gonzalo, “Infrastructure doesn’t develop once the market has taken off—it must be there for the market to take off.”
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