The current situation of hydrogen reflects a clear disparity between the ambitions of the European Union and the reality of the market, which is marked by consumption largely based on fossil fuels and a slow adoption of clean technologies.

According to the ‘Clean Hydrogen Monitor 2024‘ report by Hydrogen Europe, the installed capacity for clean hydrogen production represents only a marginal percentage of the total, highlighting the ongoing challenges in terms of infrastructure and regulation.

A Market Dominated by Fossil Hydrogen

In 2023, the total hydrogen demand in Europe was 7.9 million tons (Mt), a figure that, while significant, shows a 3% year-on-year decline due to the closure of industrial plants and the growing competition from imports.

Most of this demand was met using traditional fossil fuel-based technologies, such as natural gas reforming, which accounts for 68.4% of total production. This model contrasts with the modest growth of electrolytic hydrogen, which, despite doubling in the last two years, still accounts for only 0.4% of total installed capacity, with 385 MW operational as of September 2024.

The report highlights that 95.5% of the hydrogen consumed in Europe comes from fossil sources, underscoring the urgent need to accelerate the transition to clean technologies. In this context, sectors such as refining and ammonia production concentrate a large portion of the demand. Refineries, in particular, play a crucial role, not only because of their size but also because clean hydrogen aligns with the mobility goals set in the RED3 directive.

Main Hydrogen Consumers in Europe

Germany positions itself as the main hydrogen consumer on the continent, with a demand that places it ahead of the Netherlands and Poland, the other two major market players. Together, these three countries accounted for 41.5% of the total hydrogen consumption in Europe in 2023. This leadership is not by chance, as Germany also has a solid installed electrolysis capacity and ambitious plans to increase both domestic production and imports of clean hydrogen.

In contrast, Poland reflects a scenario with less dynamism in the development of clean technologies. Although it is the third-largest consumer, its low government ambition and limited electrolysis infrastructure development make its transition to more sustainable models difficult.

This situation could be offset by regions with better production conditions, such as the Iberian Peninsula and the Nordic countries, as long as a transportation network is developed to connect these areas with the main consumption hubs.

Italy presents a particular case, where 92% of total hydrogen consumption comes from the refining sector. The recent closure of a key ammonia production plant has left the country more dependent on its refineries as the main source of demand. In contrast, countries like the Netherlands and France have begun diversifying their uses of hydrogen, gradually incorporating it into industrial processes like green steel production.

Challenges for the Transition

Despite the opportunities, challenges remain. The infrastructure for hydrogen transport and storage is limited, making it difficult to connect regions with production surpluses to high-demand industrial centers.

Additionally, the lack of clear incentives and support mechanisms to promote the consumption of clean hydrogen continues to be a key obstacle. According to the report, the definition of renewable fuels of non-biological origin (RFNBO) and regulations on access to transport networks are priority issues that must be resolved to move toward a hydrogen economy.