European countries are falling short of electrolyser (zero-emission hydrogen generation) capacity targets due to a stall in hydrogen demands.
The Energy Industries Council (EIC) reports that out of Europe’s 31 gigawatts of green hydrogen capacity planned by 2030, only about 3 GW have reached a final investment decision (FID).
European electrolyser manufacturers have enough capacity to meet expected near-term hydrogen orders but a shortage of investable projects is leaving plants underused and putting 2030 targets beyond reach.
Rebecca Groundwater, EIC’s Global Head of External Affairs, said: “Europe has already invested in electrolyser manufacturing capacity, and policy now needs to turn project pipelines into firm demand. That means faster decisions on support schemes, clearer long-term rules for offtake and coordinated investment in transport and storage.
“Without that certainty, projects will keep slipping, factories will remain underused and the 2030 targets will become harder to reach.”
Across Europe, out of the 624 hydrogen projects that have been announced 74 have already been cancelled.
The UK is home to the continents largest national pipeline which has 130 proposed projects but 21% are on hold and only 8% are under or awaiting construction. It is predicted that they should have 3.66GW of electrolytic capacity by 2030 which is still short of the Government’s 5GW target.
A similar story can be told across Scandinavia where out of 76 projects, 18% are under or awaiting construction and 17% are on hold.
The issues stem from developers battling high production costs, uncertain demand, shifting regulations and a serious lack of long-term offtake agreements. Without contracted buyers, projects can’t give lenders and investors the revenue certainty needed to move forward.
The EIC projects that unless FIDs majorly increase, manufacturers face weak order books in the near term. If they do accelerate, the report says manufacturing constraints could begin to emerge from 2029.
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