Is realism returning to the hydrogen sector? From Hamburg to the World: EEHH at the European Hydrogen Week

To speed up the hydrogen ramp-up, the EU is facing demands from some market players to leverage support for infrastructure and electrolysis technology, remove barriers to global hydrogen trade, standardise hydrogen products and create a uniform and efficient regulatory framework.

For the fifth time, the European Commission, Hydrogen Europe and the Clean Hydrogen Partnership organised the European Hydrogen Week in Brussels – Europe's leading specialist conference on hydrogen. This year’s event was attended by 220 exhibitors and over 9,000 trade visitors. In 25 sessions, 200 national and international speakers discussed regulation, trade and technology. Sibyl Scharrer, International Cooperation Hydrogen, was on site to represent the EEHH Cluster Agency.

Does the Gartner Hype Cycle chart the future of hydrogen?

Recent years have seen an increasing appreciation of hydrogen’s importance for the energy transition since the technological breakthrough and the first commercial applications were placed on the market (innovation trigger). Strong political commitment has also contributed to hydrogen very quickly becoming a ‘Peak of Inflated Expectations’, capable of transforming the economy. But high prices and inflation – accompanied by a very complex legal framework – have deterred entrepreneurs and investors and put the brakes on progress in the hydrogen economy. Are we now reaching the ‘Trough of Disillusionment’? Industry experts believe that the trend is gradually levelling off and are cautiously optimistic about the future.

Lack of funding and stiff international competition

Investments and subsidies are powerful tools to leverage a rapid market ramp-up of the hydrogen economy. Europe already has sufficient electrolyser capacities for hydrogen production in the start-up phase. But demand, by contrast, remains inadequate. This problem could be eased by increased financial incentives and support at EU and national level. Among the reasons why green hydrogen remains too expensive for producers and users is the high capital expenditure for electrolysers. Technological innovation can boost the efficiency of key components and hence cut costs. Effective deployment of the carbon pricing instrument could make renewable energies more attractive than fossil fuels.

Compounding the situation is the significant need to make up for lost ground in the area of imports. Over-regulation must be prevented from the industry's perspective to avoid making hydrogen imports more complicated. The EU and individual Member States could simplify their tendering procedures and conclude long-term supply/purchase agreements to enable provision of the available hydrogen at attractive prices.  Europe will remain dependent on foreign hydrogen supplies until 2030. One example: Germany can only satisfy up to 40% of its demand with domestic production.

At present, around two-thirds of final investment decisions (FID) for hydrogen projects worldwide are currently made in the USA and China. By building a hydrogen economy, both of these countries are pursuing a three-pronged strategic industrial policy objective: market share, technology leadership (electrolyser and fuel cell) and climate protection. A recent paper by the Boston Consulting Group states that “Europe risks being left behind by the USA and China in the competition for green hydrogen in the next three to five years.” Globally ambitious Chinese electrolyser manufacturers in particular receive state support to position their products and technology on the international and European markets at favourable prices, thus driving the development of the global hydrogen economy. At the same time, however, many European market players are complaining of unfair competition, as European companies are not granted the same reciprocal market access as their rivals from China. What is more, the EU has created a highly complex framework for the production and import of green hydrogen, which might precipitate a slowdown in H2 imports from third countries in particular.

And financial competition is not the only challenge that Europe is facing. The EU Commission has implemented a variety of measures to reduce Europe's dependence on China and strengthen the European supply chain in the hydrogen economy. These include that the share of electrolyser stacks from China will be capped at 25 percent for projects bidding in European Hydrogen Bank tenders.

Expansion of cooperation with India

In the midst of geopolitical tensions, both the EU and Germany are focused on diversifying and securing the global supply chain, and India is a lynchpin in this regard. Hydrogen Europe used the occasion of the 2024 European Hydrogen Week to sign a Memorandum of Understanding (MoU) with the Green Hydrogen Association (GH2 India) to promote cooperation and mutual support in the development and expansion of the hydrogen economy in Europe and India. The strategic partnership aims to improve industry standards, accelerate sustainable development and create a favourable framework for scaling the clean hydrogen supply chain in Europe and India.

Germany and India agreed on a joint Green Hydrogen Roadmap around four weeks prior to the European Hydrogen Week. Its objectives include ensuring the economic competitiveness of green hydrogen and supporting its global production and trade. According to the Roadmap, India intends to produce around 5 million tonnes of hydrogen per year by 2030. Over the same time horizon, demand for hydrogen and its derivatives in Germany is estimated to reach 95 to 130 TWh, equivalent to the calorific value of over 3 million tonnes of hydrogen. India could cover a significant portion of this demand.  

In conclusion:

The event focused on various trends, technological developments, business models and many other aspects relating to the European hydrogen economy. Aside from that, attendees were as busy as always building their networks.