Europe Green Hydrogen Market: Current Analysis and Forecast (2024-2032)

Green hydrogen is expected to play an important role in the EU's goal to achieve a 55% reduction in greenhouse gas (GHG) emissions by 2030 compared to 1990. The European Commission (EC) estimates that hydrogen's share in the EU's energy mix could reach 13%-20% by 2050 (EC, 2022), and is therefore determined to scale up the development of the renewable variant to eliminate the emissions resulting from the use of the fossil-fuel-based variant. The REPowerEU initiative sets out to increase the share of renewable energy in the EU's final energy consumption to 45% by 2030. One of the milestones towards achieving this target is to reach 10 MT of EU green hydrogen production - from 65-80 gigawatts (GW) of electrolyzer capacity (EC, 2022; IEA, 2022) - plus another 10 MT of supply from non-EU imports by that year.

Based on the electrolyzer, the green hydrogen market is divided into three segments based on the proton exchange membranes electrolyzer, alkaline electrolyzers, and others. Amongst these, alkaline electrolyzers have the highest market share as it is the most common and mature technology used for green hydrogen production. Additionally, alkaline electrolyzers are cost-effective and have a long operational life.

Based on source, the green hydrogen market is categorized into solar energy, wind energy, and others. Solar energy contributes significantly to the green hydrogen production process, and its production is considered a promising way to use solar energy and combat climate change caused by the burning of fossil fuels.

Based on end-users, the green hydrogen market is divided into refining, ammonia, and others. The refining segment acquired the largest share as the refinery is the large industrial consumer of hydrogen, most of which is currently supplied by fossil fuels. The rising need to meet the net zero emissions targets has escalated the demand for green hydrogen in industries to reduce carbon emissions. Moreover, the government provides incentives to use green hydrogen in refineries, and exempting electrolyzers from grid fees, taxes, and levies is further accelerating the market share of refineries.

For a better understanding of the market adoption of the green hydrogen industry in Europe, the market is analyzed based on its presence in countries such as (Germany, the UK, France, and the rest of Europe). The market for green hydrogen in Europe is growing at a steady rate. This is owing to the increasing efforts to meet the EU's renewable hydrogen targets. Moreover, current hydrogen demand in Europe amounts to 8.7 Mt yearly. The sheer size of the existing hydrogen market provides an opportunity for reducing carbon emissions, as well as providing a scalable offtake market for large-scale electrolyzes. Further, with the presence of production, import, and end-use targets as well as funding mechanisms in place, the EU is providing an increasingly attractive framework for hydrogen value chain development to kick off. In addition, to a joint effort to boost the green hydrogen economy, the German Federal Government and the European Union have allocated 800 million euros, which aims to foster renewable fuel of non-biological origin (RFNBO) hydrogen production within the EU and the European Economic Area.

Some of the major players operating in the market include ABB, Conrad Energy Limited, Gen2 Energy, Lhyfe, TES H2, Protium, Shell, ThyssenKrupp Industrial Solutions AG, Uniper, and Nel Hydrogen A/S.