In 2024, more than 20% of announced hydrogen projects in Europe were halted or cancelled, according to Westwood Global Energy. The latest casualty is ScottishPower, Iberdrola’s UK subsidiary, which has suspended development of its Cromarty (10.6 MW) and Whitelee (7.1 MW) green hydrogen plants, despite having secured support under the UK’s Hydrogen Allocation Round (HAR1). Both projects were part of a £2 billion revenue support package designed to narrow the cost gap with fossil-derived hydrogen.
The company cited a “complicated business environment” and “limited commercial opportunities,” echoing Iberdrola chairman Ignacio Galán’s warning at Davos that momentum for green hydrogen had waned. Galán had pointed to stalled access to Next Generation EU funds and a lack of institutional follow-through, underlining how investor enthusiasm is colliding with slow policy execution.
ScottishPower’s decision underscores a broader European pattern. In July, Repsol halted a 200 MW hydrogen project with Ric Energy in Puertollano, Spain, after pre-investment studies deemed it technically and economically unviable. Statkraft announced a pause on new projects in May, citing “growing uncertainty in the market.” Fertiberia withdrew from Norway’s Barents Blue clean ammonia project, and Neste abandoned a 120 MW electrolyzer plan in Porvoo. Even large industrial offtakers are retreating: ArcelorMittal scrapped hydrogen production plans in Asturias and declined over €1 billion in German subsidies for decarbonization, citing competitiveness concerns in a global steel market dominated by cheaper alternatives.
Underlying these cancellations is a structural challenge. Renewable hydrogen production remains significantly more expensive than fossil hydrogen, while end-users show limited willingness to absorb the cost differential. Key technologies to enable scale, such as ammonia cracking for transport and large-scale electrolyzer deployment, are still commercially immature. The German Institute of Development and Sustainability (IDOS) describes this as a “structural crisis” rather than a temporary market fluctuation, with economics—not just regulation—stunting deployment.
The financial gap is clear. Electrolytic hydrogen costs in Europe have remained in the €4–6/kg range, while fossil-based hydrogen sits closer to €1.5–2.5/kg, depending on gas prices and carbon pricing exposure. Without higher carbon prices or stronger subsidy regimes, the commercial case for green hydrogen remains weak. The UK HAR1 mechanism, though valued at over £2 billion, has not been sufficient to secure project viability, raising questions about whether future allocation rounds can shift market fundamentals.
Nevertheless, political momentum persists. Spain has allocated €1.223 billion to seven major projects, and the European H2med corridor—anchored by the BarMar hydroduct between Barcelona and Marseille—is advancing under the joint venture of Enagás, Portugal’s NaTran, and France’s Teréga. These initiatives reflect the policy ambition to establish Europe as a hub for renewable hydrogen trade. But without cost reductions and mature transport technologies, infrastructure risks outpace viable supply and demand.
For industry players, the pattern of suspensions points to a recalibration rather than abandonment. Hydrogen retains strategic relevance in hard-to-abate sectors such as steel, cement, and fertilizers, where electrification is less feasible. Yet the current pace of cancellations highlights a growing gap between decarbonization rhetoric and economic reality. Unless governments address cost parity and provide stable, bankable frameworks, the hydrogen pipeline risks shrinking further, leaving Europe vulnerable to international competitors that can deploy hydrogen more cheaply.
