The European Hydrogen Economy–Taking Stock and Looking Ahead
An outlook until 2030
The EU and other national strategies have put major targets for hydrogen, including at least 10 MtH2 of renewable hydrogen production and 40 GW of installed electrolyzer capacity by 2030. With Deloitte’s tailor-made hydrogen dashboard, the announced and projected demand and supply of hydrogen in Europe can be visualized and broken down by technology, end-use sector, geography, and energy source. Based on this, major implications for investors and stakeholders of the whole energy system are derived and described in this report.
Clean hydrogen investment activity is surging. Project announcements for clean hydrogen production have ramped up in Europe with planned capacity reaching 54 GW and 5.2 MtH2/year by 2030. Electrolyzers will predominate at 85 percent of installed capacity (+4 GW/ year), but methane reformers + CCS will produce 25 percent of volumes (1.3 MtH2) in 2030.
75 percent of hydrogen supply is centered around the North Sea, with GW-scale “Hydrogen Valleys” creating hydrogen ecosystems that help spawn a multitude of smaller supply and end-use projects Nevertheless, a supply gap is emerging.
Announced projects are not yet enough to reach all targets; in particular, neither EU production target for 2030 has been met. However, based on observed trends, we forecast European clean hydrogen supply will reach some 170 GW and 20 MtH2 by 2030. This implies a 10 MtH2 supply gap against potential demand of 30 MtH2 in 2030, the volume needed to ensure the EU energy sector remains on its path to net zero emissions according to our Hydrogen4EU study.
This makes increasing imports from outside Europe and encouraging a faster ramp-up of local production even more vital.
Nearly half a trillion euros are needed to kickstart the hydrogen economy
The production costs of clean hydrogen fall between 3 and 6 €/kgH2. Financial support and regulatory action is crucial to provide sufficient hydrogen at an affordable price.
Overall, the EU H2 project pipeline is slated to deliver 36 GW of electrolyzer capacity but only 3.1 Mt of renewable H2. Achieving the forecasted 170 GW and 20 MtH2 bears its own challenges and opportunities: almost half a trillion euros of investments will be needed to sustain a capital-intensive ramp-up of clean hydrogen production in Europe.
A 10 MtH2 supply gap could raise prices above market-clearing levels. This would encourage new entrants or incumbents to increase their supply, thus leading to a decrease in prices, provided regulators set the right economic conditions for an acceleration of supply projects.
The Deloitte hydrogen project tracker (H2-Tracker)
This dashboard of European hydrogen trends allows visualizing the announced and projected demand and supply of hydrogen by technology, end use sector, geography, and energy source. The tool provides:
- A combination of programmatic data harvesting and text classification for rapid and accurate data collection to stay on top of an ever growing pipeline of projects & announcements.
- A wealth of frequently updated data on the industry’s efforts in a dawning hydrogen economy, covering energy sources, capacities, costs, locations, project partners, funding calls and more.
- Strong emphasis on user interactivity to slice and dice the trends of hydrogen in Europe. Dynamic and customizable visualizations present easy to interpret overviews of the market data.
Download the Deloitte report “The European hydrogen economy” and learn more.
