Final investment decisions remain the main bottleneck for Europe’s green hydrogen pipeline, which makes ITM Power’s latest notice to proceed notable more for what it signals than for its size.
The UK based electrolyzer manufacturer confirmed it will supply PEM units for a 20MW project after an unnamed customer took FID, authorizing work to begin and adding the contract to ITM’s order backlog. While the project’s location and end use remain undisclosed, the company described it as industrial scale, a classification that still applies to only a limited subset of hydrogen projects that have moved beyond planning.
For ITM Power, the announcement fits into a broader effort to reset its commercial profile after several years of uneven execution across the electrolyzer sector. The company reported its strongest six month revenue performance to date while narrowing losses, driven in part by a deliberate move away from low margin legacy contracts. By January, profitable agreements accounted for 71 percent of its backlog, up from 60 percent in April 2025, a shift that reflects both tighter project selection and a slower but more disciplined market.
Chief executive Dennis Schulz characterized the 20MW deal as evidence that industrial customers are still willing to commit capital under the right conditions. Yet the absence of disclosed details underlines a recurring issue in the hydrogen market: projects that reach FID often do so quietly, with limited transparency on offtake pricing, subsidies, or regulatory treatment. That opacity makes it difficult to assess whether such projects are replicable or dependent on bespoke support structures.
The scale itself is revealing. At 20MW, the project sits below the gigawatt ambitions frequently cited in national hydrogen strategies but above pilot installations that have dominated recent announcements. This middle ground is where electrolyzer suppliers increasingly need to operate if they are to generate revenue without overextending balance sheets. For ITM, adding contracted capacity without diluting margins is critical after years in which headline order volumes did not translate into sustainable earnings.
Policy remains a central variable. ITM recently joined five other manufacturers in launching the Electrolysers for Europe coalition, urging the European Union to relax green hydrogen production rules, strengthen demand signals, and provide protection for domestic suppliers. The appeal reflects frustration that strict additionality and renewable matching requirements have slowed project development, particularly for industrial users seeking predictable costs.
This regulatory backdrop helps explain why even projects that secure FID are still framed cautiously. Without clearer long term offtake mechanisms or carbon pricing signals, developers remain exposed to volatility in power markets and policy interpretation. ITM’s improving backlog mix suggests suppliers are adapting by prioritizing bankability over scale, but it also implies that the European electrolyzer market may grow more slowly than political targets suggest.
