European hydrogen executives are urging the European Union to introduce “Made in Europe” requirements for state funded hydrogen projects, a move they argue is necessary to prevent a repeat of the solar manufacturing collapse of the 2000s, according to Reuters.
The call comes after a difficult year for Europe’s green hydrogen sector. High electricity prices, delayed permitting, and weak demand signals led to widespread project cancellations and postponements. While policy targets for renewable hydrogen remain ambitious, cheaper hydrogen derived from fossil fuels continues to dominate industrial consumption, eroding the near term business case for green alternatives and limiting order volumes for European equipment suppliers.
Executives argue that without targeted procurement rules, European manufacturers risk being displaced by Chinese competitors that benefit from scale, lower production costs, and coordinated industrial policy. Kim Hede-gaard, chief executive of Power to X at Topsoe, told Reuters that the industry broadly supports EU plans to apply “Made in Europe” criteria to state funded electrolyzer procurement. He pointed to solar photovoltaics as a cautionary example, where Europe ceded manufacturing leadership to China and became structurally dependent on imports within a decade.
The proposal under discussion would initially focus on electrolyzers, the core technology for green hydrogen production. However, the idea is encountering resistance from some EU member states and industrial players concerned about higher costs, slower deployment, and potential trade repercussions. Negotiations are ongoing over which technologies should be covered and whether requirements should extend to projects involving non EU countries, an issue particularly relevant for cross border hydrogen and ammonia developments.
From the perspective of manufacturers, access to state backed demand is critical. Haakon Volldal, chief executive of Nel Hydrogen, noted that European firms are largely excluded from the type of gigawatt scale projects now being rolled out in China. Without comparable domestic anchor projects, European suppliers struggle to achieve the production volumes needed to compete on cost. State contracts, he argued, could provide the visibility and scale required to unlock private investment.
Institutional voices within Europe are increasingly aligned with this assessment. European Investment Bank president Nadia Calviño recently identified electrolyzers and wind energy as sectors where Europe still has a realistic chance to maintain technological leadership. In a letter ahead of an EU leaders’ meeting on competitiveness, she stressed that preserving this position would require sustained investment across EU value chains rather than reliance on imported equipment.
The urgency is reinforced by global market data. China already accounts for roughly 60 percent of global electrolyzer manufacturing capacity, according to industry estimates. Yet Europe has not lost its home market. Analysis from the Oxford Institute for Energy Studies shows that European companies supplied more than 80 percent of electrolyzer capacity installed in Europe between 2022 and 2023. This dominance, however, reflects early stage projects and policy driven demand rather than structural cost competitiveness.
The debate over “Made in Europe” rules highlights a broader tension in the EU’s hydrogen strategy. Rapid deployment is essential to meet climate targets, but relying heavily on imported equipment risks hollowing out domestic manufacturing before it reaches scale. Conversely, strict localization requirements could slow project rollouts and increase public spending at a time when budgets are under strain. How the EU resolves this trade off will shape not only the future of its hydrogen industry, but also its ability to compete with China in the next phase of clean energy manufacturing.
