The European Commission announced 235 cross-border energy projects on December 1, with at least 100 hydrogen infrastructure initiatives commanding investment exceeding €80 billion, yet regulatory authorities and industry veterans warn these pipelines risk becoming stranded assets financed by climate funds. The Agency for Cooperation of Energy Regulators found in 2024 that hydrogen network plans are constructed on aspirations rather than concrete market needs, increasing the likelihood of overinvestment in underutilized infrastructure.
Gas Industry Dominance Undermines Climate Alignment
Over 90% of submitted hydrogen projects originated from gas transmission operators, contradicting the 2022 revision of cross-border energy infrastructure legislation designed to synchronize climate objectives with energy development. This structural bias persists through the European Network of Transmission System Operators for Gas, which maintains significant authority over project selection despite documented conflicts of interest. ACER identified in 2021 that ENTSOG proposed nearly €75 billion in gas projects, clearly exceeding reasonable needs, questioning the credibility of assessments conducted by an industry body representing companies positioned to profit from infrastructure expansion.
Repurposing Economics Fail Technical Scrutiny
Pipeline retrofitting costs undermine the financial viability of converting existing natural gas infrastructure for hydrogen transport. Hydrogen embrittlement of pipeline steels, smaller molecular size requiring upgraded sealing systems, and volumetric energy density one-third that of natural gas necessitate new compressors, valves, and monitoring equipment at costs that gas utilities systematically underestimate. George Verberg, former CEO of Dutch network operator Gasunie and past president of both Eurogas and the International Gas Union, stated that the cost implications of making pipelines safe and functionally effective for hydrogen would be disproportionate.
Production Capacity Lags Target by a Factor of Eight
Operational electrolyser capacity reached approximately 5 GW in 2024, falling dramatically short of the 40 GW renewable hydrogen electrolyser target for 2030. The EU aims to produce 10 million tonnes of renewable hydrogen domestically by decade’s end, requiring 140 GW of installed electrolysis capacity if water electrolysis serves as the exclusive production method. Current renewable hydrogen production costs range from €4 to €8 per kilogram compared to €1 to €2 for fossil-based hydrogen, maintaining a three-to-four-fold price differential that suppresses industrial adoption.
Fossil Lock-In Through Green Transition Branding
Civil society organizations, including Food & Water Action Europe and CEE Bankwatch Network, documented that Projects of Common Interest and Projects of Mutual Interest enable fossil gas pipeline initiatives to access climate financing under hydrogen-ready classification. The South H2 Corridor connecting North Africa to Germany through Italy plans to repurpose 65% of existing gas transmission systems without guarantees of exclusive green hydrogen transport. With global green hydrogen production below 0.1% of total hydrogen output in 2022, these corridors face a high probability of carrying fossil-based hydrogen for extended periods while receiving public funds allocated for energy transition.
Regulatory Framework Grants Privileged Market Access
Projects designated as PCI and PMI status receive expedited permitting procedures and preferential access to the Connecting Europe Facility, which allocated €5.8 billion for energy infrastructure from 2021 to 2027. Between 2014 and 2020, 107 projects received €4.7 billion in grants, with gas infrastructure capturing €1.5 billion across 66 actions. The December 2025 announcement identified planned networks linking the Netherlands, Belgium, Germany, France, Spain, and Portugal, alongside corridors connecting Romania, Greece, and Bulgaria.
Market Readiness Absent for Long-Distance Networks
Investment in long-distance hydrogen pipelines proves premature given current market conditions characterized by sluggish demand integration and uncertain industrial uptake. Germany projected hydrogen demand reaching 4 million tonnes by 2030, yet several member states lack explicit consumption targets, creating trajectory uncertainty across the market. Regional industrial clusters where supply and demand match rapidly present more economically rational deployment pathways than continent-spanning pipeline systems.
