The European Union is at risk of not meeting its ambitious target of consuming 20 million tonnes of renewable hydrogen by 2030, according to the 2024 Market Monitoring Report released by the EU Agency for the Cooperation of Energy Regulators (ACER).
The current consumption of hydrogen stands at 7.2 million tonnes, but nearly all of it (99.7%) comes from fossil fuels. The hydrogen produced via electrolysis, which is considered renewable, is only around 22,000 tonnes—a negligible amount compared to the EU's goal.
ACER noted that the cost of producing hydrogen via electrolysis is still two to three times higher than producing hydrogen from natural gas, further complicating the transition to renewable hydrogen. While the EU aims for a range of 2 million to 4 million tonnes of renewable hydrogen consumption by 2030, slow progress in uptake across key sectors like industry and transport makes achieving these goals challenging.
Currently, Europe has just over 200 MW of electrolyser capacity installed. However, projects for around 60 GW of electrolyser capacity are awaiting final investment decisions (FID), while the EU has set a target of 100 GW by the end of the decade. ACER highlighted the risk posed by sector uncertainties, including fluctuating demand and high production costs, which could impede the success of these projects.
In the hydrogen transmission sector, only two of 107 planned pipeline projects— the National Hydrogen Backbone in the Netherlands and the mosaHYc project between France and Germany—have reached FID.
To accelerate progress, ACER recommended improving the effectiveness of financial support, calling for clearer funding guidance from the European Commission (EC) and better capacity from EU Member States to allocate this funding.
It also suggested establishing financing mechanisms to manage risks from uncertain hydrogen demand. Additionally, national and international certification schemes for hydrogen trade within the EU and for hydrogen imports should be advanced. Coordination between gas, electricity, and hydrogen transmission system operators is also crucial for creating a robust and integrated hydrogen network.
