The European Commission has highlighted concerns over the slow adoption of green hydrogen technology by private industry, a critical component of Brussels’ ambitious Green Deal.
On June 3, Energy Commissioner Kadri Simson underscored the insufficient number of projects reaching final investment decisions and the lack of contracts from off-takers committing to hydrogen.
In response to these challenges, the European Commission has introduced a “pilot mechanism” designed to expedite investment in hydrogen technology. This initiative aims to streamline information on demand and supply for renewable and low-carbon hydrogen, facilitating connections between European and foreign suppliers and off-takers. The Commission’s press release emphasized that this mechanism would support the construction of large-scale electrolysers and the signing of initial off-take agreements, which are essential for the advancement of hydrogen infrastructure.
While the EU remains optimistic about hydrogen’s role in decarbonizing European industry and reducing reliance on Russian fossil fuels, there is notable market skepticism. Hydrogen, particularly in its green form produced via electrolysis using renewable energy, is still seen by many as an unproven technology.
A 2022 report by the UK House of Commons Science and Technology Committee concluded that hydrogen is unlikely to be economically viable for home heating or fueling passenger cars in the short to medium term. The report cited significant costs, technological hurdles, and infrastructure challenges, suggesting that it would be imprudent to rely on hydrogen for substantial carbon emission reductions.
Adding to the skepticism, German truck manufacturer MAN recently stated that hydrogen-powered buses and trucks cannot compete with electric vehicles. CEO Alexander Vlaskamp pointed out that the total cost of ownership for electric vehicles is always cheaper, and the current cost of hydrogen, which exceeds 13 to 14 euros per kilogram, makes it impractical. He emphasized that even if green hydrogen becomes available, it will likely be prioritized for industrial uses such as in steel, cement, or plastics, rather than for widespread transportation or heating.
Despite these challenges, the European Commission continues to advocate for hydrogen’s pivotal role in achieving the Green Deal targets. The pilot mechanism is a strategic move to gather and disseminate information, aiming to bridge the gap between supply and demand. However, the practical and economic challenges highlighted by industry experts and reports cannot be overlooked.
The European Commission’s push for green hydrogen through the new pilot mechanism reflects a strong commitment to renewable energy and decarbonization. However, the road ahead is fraught with significant technical, economic, and infrastructural challenges. The skepticism from industry leaders and experts underscores the need for cautious optimism.
While the pilot mechanism may accelerate some aspects of hydrogen adoption, it remains to be seen whether these efforts can overcome the substantial hurdles identified by various stakeholders. The future of hydrogen as a key component of Europe’s energy strategy will depend on ongoing innovation, investment, and the ability to address the critical issues that currently impede its widespread adoption.
By examining these developments critically, we can better understand the potential and limitations of hydrogen technology in the context of global energy transitions.
