The contours of the global hydrogen industry came into sharper focus this month during European Hydrogen Week in Brussels — particularly from the perspective of importing nations.
Yet, the mood was one of frustration. Many participants described Europe’s regulatory framework as overly complex and slow-moving, causing project delays and deterring investors. Still, there was an undercurrent of inevitability, given binding EU mandates and ongoing pipeline projects positioning Europe to become the world’s largest demand hub for low-carbon hydrogen.
Despite a rising number of project cancellations, the industry’s determination to move forward was evident.
Jorgo Chatzimarkakis, CEO of Hydrogen Europe, remarked that “the tourists have left,” referring to the exit of weaker projects from the market. He called for more realism in policy design, including mandatory minimum offtake agreements for heavy industries.
He noted that the hydrogen sector stands at a crossroads, urging policymakers to ease regulatory burdens so that a viable clean hydrogen market can finally take shape.
Projects and progress
The conference showcased several major initiatives. Among them was a long-term supply agreement between Germany’s RWE AG and France’s TotalEnergies, under which 30,000 metric tons of green hydrogen will be transported annually from a 300-megawatt electrolyzer in Lingen to Total’s refinery in Saxony-Anhalt via a 600-kilometer pipeline starting in 2030.
In Rotterdam, Shell presented updates on its 200-megawatt electrolyzer, designed to produce around 22,000 tons of green hydrogen per year, to be delivered through a new 30-kilometer pipeline to Shell’s Energy and Chemicals Park.
Ivana Jemelkova, CEO of the Hydrogen Council — an industry coalition of major corporate leaders — unveiled findings from the Global Hydrogen Compass, produced in collaboration with McKinsey & Company.
According to the report, committed investment in low-carbon hydrogen has surpassed $110 billion — a tenfold increase over the past five years — with roughly 500 projects having reached final investment decision, construction, or operational stages.
These projects are expected to support between 9 and 14 million tons of annual clean hydrogen capacity by 2030. China leads with $33 billion in committed capital, followed by North America with $23 billion, and Europe with $19 billion.
“The industry is in real build mode,” Jemelkova said, noting that 97% of CEOs view hydrogen as essential for decarbonizing hard-to-abate sectors.
Regulation and reaction
Senior representatives from Oman and India presented ambitious national hydrogen programs focused on domestic investment and market development as stepping stones to future exports.
However, they bluntly stated that compliance with current EU rules is “impossible,” calling for greater regulatory clarity from Brussels.
At the heart of the problem lies the source of electricity used for electrolysis.
The European Commission has issued what industry participants describe as excessively strict rules defining what qualifies as a “renewable fuel of non-biological origin” (RFNBO) under the updated Renewable Energy Directive (RED III).
EU targets require that 42% of hydrogen used in industry by 2030 be classified as RFNBO, rising to 60% by 2035. The criteria are built around three core principles:
• Additionality: renewable electricity used must come from new capacity, not existing plants.
• Temporal correlation: power and hydrogen production must occur within the same hour starting in 2028.
• Geographic correlation: both must be produced within the same region.
These rules apply to hydrogen made within Europe and to imports — a point many companies consider unworkable, as it artificially inflates costs.
Industry leaders are urging Brussels to delay the enforcement of additionality and temporal correlation requirements until viable business models can mature.
At the member-state level, implementation is even more complex, as national governments apply RED III through their own incentives, infrastructure, and certification systems — a slow process that has frustrated developers.
Werner Ponikwar, CEO of thyssenkrupp nucera, which supplies electrolysis equipment, said: “The industry needs clarity to plan. What we need from Brussels is a regulatory environment that enables progress, not one that blocks it.”
Building the backbone
RED III mandates binding renewable hydrogen quotas: EU members must integrate the 42% industrial target into their national energy and climate plans. The directive also includes sub-targets for transport and aviation to stimulate demand for hydrogen, its derivatives, and synthetic fuels.
In transport, member states must either cut fuel emission intensity or ensure that 29% of total energy use comes from renewables, with sub-quotas for hydrogen and bio- and synthetic fuels.
In aviation, sustainable fuel must reach at least 34% of total use by 2040, including a dedicated share for hydrogen-based synthetic fuels.
While shipping faces no direct quotas, it falls under the EU Emissions Trading System (ETS).
These mandates are accelerating midstream infrastructure development. The EU has mapped five key hydrogen corridors — using new pipelines or repurposed gas lines — to form an integrated hydrogen commodity market centered on Germany.
The 600-kilometer RWE–TotalEnergies pipeline will form part of the North Sea Corridor, one of the first links in Germany’s emerging hydrogen grid, which will eventually connect to the Dutch network from Rotterdam.
When the stars align
Martin Tengler, head of hydrogen research at BloombergNEF, outlined how the market could scale.
Based on Bloomberg’s database of projects with binding offtake contracts, global hydrogen supply is expected to reach 5.5 million tons by 2030 — just 20% of announced national targets.
Tengler identified four “stars” that must align to drive the market forward:
• Financing: a greater share of the $270 billion in government subsidies must go toward stimulating demand.
• Demand incentives: tools like contracts for difference (CfDs) and binding quotas, which have yet to be deployed at scale.
• Carbon pricing: essential to make clean hydrogen competitive with gray hydrogen, though current carbon prices remain too low to matter before the 2030s.
• Midstream infrastructure: ports, pipelines, and storage facilities require continued public support.
He highlighted the RWE–TotalEnergies deal as a textbook case of this alignment — RWE received €690 million in German state aid, while Total faces RED III obligations and high carbon prices at home, compelling it to pay a premium over gray hydrogen costs.
Germany’s public funding for hydrogen pipeline infrastructure also enabled the agreement.
Resilience as a new demand driver
A major theme of the discussions was hydrogen’s role in enhancing economic resilience amid surging energy demand from data centers and ongoing geopolitical disruptions.
Domestically produced and stored low-carbon hydrogen was portrayed as a strategic fuel for Europe’s energy security, prompting governments to defend mandatory quotas and absorb infrastructure costs to support the nascent sector.
The concept of “resilience” may thus emerge as a new demand driver — complementing subsidies, mandates, and quotas — pushing Europe one step closer to its overarching goal of transforming low-carbon hydrogen into a competitive traded commodity underpinned by reduced regulatory and financial risks.
