Evaluating the Path to a Sustainable Hydrogen Future in the EU
Key Ideas
- Current renewable hydrogen production in the EU is significantly below consumption targets, indicating a need for accelerated production and secure international supply chains.
- The EU is projected to experience a significant increase in demand for renewable hydrogen over the next five years, driven by sector-specific mandates and voluntary demand.
- Additional demand drivers for renewable hydrogen include the steel and maritime sectors, contributing to the growing importance of hydrogen in hard-to-electrify industries.
- Infrastructure investments for hydrogen derivatives will be crucial to establish resilient supply chains, particularly in key demand markets like the Netherlands, France, Belgium, and Germany.
The European Union's focus on renewable hydrogen as a key element in decarbonizing hard-to-electrify sectors has gained global attention, with the EU setting ambitious consumption targets by 2030. However, current production levels of renewable hydrogen fall drastically short of these targets, highlighting the urgent need for a delivery-focused approach to bridge the gap. The EU is expected to see a surge in demand for renewable hydrogen driven by sector-specific mandates under the Renewable Energy Directive (RED III), with projected demand ranging from 3.7 to 7.0 million tonnes per year by 2030. Additional demand from sectors like steel and maritime further emphasizes the crucial role of hydrogen in achieving climate goals. Infrastructure planning is identified as a key factor in meeting this demand, with a focus on accelerating investments in both imported and intra-EU traded hydrogen derivatives to ensure robust supply chains in key markets like the Netherlands, France, Belgium, and Germany. Overall, the report underscores the importance of strategic policy levers and a stable regulatory environment to support the growth of the EU's renewable hydrogen industry and enhance its position in the global energy transition.