Europe’s hydrogen industry faces a crucial challenge: simplifying its regulatory framework and increasing funding to maintain its global competitiveness. This is the view of Peter Collins, Press & Media Officer at Hydrogen Europe, in conversation with Strategic Energy Europe, who points out that while the European Union has allocated over 250 million euros for hydrogen infrastructure under the Connecting Europe Facility (CEF), bureaucratic hurdles and a lack of effective investment are delaying implementation.
“The allocation of funds is a positive step, but in reality, projects face regulatory barriers that slow down investment decisions,” Collins emphasises. “If we want Europe to lead in hydrogen, we need a clearer and more predictable regulatory environment.”
The Clean Industrial Deal (CID), set to be unveiled by the European Commission on 26 February, aims to tackle these challenges by creating a demand-driven market for decarbonised industrial products and simplifying regulations. Hydrogen Europe has published a position paper with strategic recommendations, highlighting the need to define resilience criteria in auctions, streamline the definition of RFNBOs (Renewable Fuels of Non-Biological Origin), and enhance funding schemes.
“The CID could make a difference if it focuses on reducing bureaucracy and ensuring financing mechanisms are accessible to projects,” says Collins.
Regulation and funding: The two biggest challenges in Europe
Hydrogen Europe argues that the lack of a streamlined regulatory framework is one of the key factors holding back H2 development in the region. Collins stresses that the CID must prioritise regulatory simplification and the creation of markets for decarbonised industrial products, such as steel and cement.
“The current framework is complex and creates uncertainty for investors. We need the CID to accelerate the adoption of the Low-Carbon Hydrogen Delegated Act, which will provide a more stable environment for renewable hydrogen projects,” Collins explains.
On the financial front, while Europe has committed 37 billion euros to hydrogen projects at the national level and 18.9 billion euros through IPCEIs (Important Projects of Common European Interest), most of these funds have yet to be disbursed.
Additionally, infrastructure investment remains insufficient: only 360 million euros have been spent on green H2 networks through CEF-E and CEF-T, and funding for refuelling stations (HRS) is significantly lower compared to electric vehicle charging infrastructure.
“Financing mechanisms must be activated faster. The industry needs certainty to make investment decisions,” warns Collins.
Global competition: How can Europe keep up with the US and China?
The Inflation Reduction Act (IRA) in the US and China’s aggressive investment in this technology has put pressure on the EU. While Europe struggles with bureaucratic obstacles, the US strategy focuses on direct incentives, such as tax credits for green H2 production.
“Europe has a strong foundation in innovation and technology development, but it needs to unlock the sector with simpler regulations and greater financial support,” says Collins. “It is not too late to claim a key role in the global hydrogen market.”
To avoid strategic dependencies, the EU is developing the Net Zero Industry Act (NZIA), which aims to strengthen the resilience of European supply chains. As part of this framework, measures are being introduced to limit the participation of Chinese electrolysers and components in projects funded by the bloc.
“We need a balance: fostering competition without creating dependencies that make us vulnerable to geopolitical dynamics,” Collins explains.
Hydrogen corridors: Key to integrating Europe’s infrastructure
Among strategic projects, Collins highlights the importance of hydrogen corridors, such as H2Med, the SouthH2 Corridor, and the Nordic-Baltic Hydrogen Corridor, in integrating Europe’s infrastructure. Connecting the Iberian Peninsula to Germany, France, and Benelux will enable the efficient distribution of renewable hydrogen from high-production areas to high-demand regions.
Additionally, international H2 trade will be crucial for the sector’s competitiveness. The EU has already signed agreements with countries such as Canada, India, Brazil, and Saudi Arabia, aiming to ensure a diversified global supply.
“The hydrogen market cannot be solely European; it must be global. Partnerships with countries outside the EU will be essential for the sector’s growth,” says Collins.
Trends for 2025 according to the Clean Hydrogen Monitor
According to the Clean Hydrogen Monitor 2023, H2 production in Europe is expected to increase significantly between 2025 and 2030, driven by investments in electrolysers and the development of new industrial projects.
However, the report warns that the gap between supply and demand could widen if consumption-support mechanisms are not implemented. Currently, the cost of green hydrogen remains up to three times higher than that of grey hydrogen, making market incentives crucial.
“Without sustainable demand-side markets, green H2 growth will be limited. Aligning production with consumption is key,” Collins highlights.
Europe has the potential to lead in this technology but to achieve this, it must overcome regulatory barriers and reinforce its financial backing. The Clean Industrial Deal and the Net Zero Industry Act are crucial opportunities to enhance the sector’s competitiveness, but their success will depend on swift and effective implementation.
“It is not just about investment; it is about creating the conditions for that investment to translate into real projects. Europe has the opportunity to lead in hydrogen, but time is critical,” Collins concludes.
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