Green hydrogen, once hailed as a key solution for decarbonizing heavy industries and transport, is facing a global slowdown. Projects are being cancelled, investments reduced, and initial optimism is giving way to economic and technical challenges.
Initially promoted as the fuel for hard-to-electrify sectors like steel production, long-haul transport, and chemicals, green hydrogen is now considered too expensive for large-scale adoption. Companies that led the hydrogen race are pulling back or revising their strategies.
🔹 EU Ambitions Off Track
According to Westwood Global Energy, only about 12 GW of green hydrogen capacity is likely to be deployed in the EU by 2030—far below the target of 40 GW. “In the current state, I really don’t see the EU meeting its 2030 hydrogen goals,” said analyst Jun Sasamura.
🔹 Investment Cutbacks
Major players such as EDP, Iberdrola, and over a dozen other companies across Europe, Asia, and Australia have postponed or scaled back hydrogen initiatives. In 2023 alone, over 20% of EU-based projects were either cancelled or delayed.
🔹 Costs Remain Too High
Green hydrogen production costs are at least 2–3 times higher than natural gas. Even with a possible 30–40% cost reduction over the next 10–15 years, the economic gap remains large. “It’s economic suicide,” said Roman Diederichs of Germany’s Dirostahl, comparing current prices.
🔹 Governments Lower Targets
France, Portugal, the Netherlands, and Italy have already reduced their funding and capacity targets. In Australia, 99% of the A$100 billion worth of hydrogen projects announced for the next five years have not progressed beyond the concept stage.
🔹 Infrastructure Lags Behind
Storing and transporting hydrogen is technically complex. It requires high-pressure tanks, ultra-low temperatures, and presents leakage risks. Spain plans to build a 2,600 km hydrogen network by 2030 and link it to the pan-European H2Med corridor—but even that is expected to face 2–3 years of delays.
Hydrogen still holds promise for the energy transition, but for now, it remains an expensive, complex solution lacking clear market demand. Without viable buyers and economic incentives, large-scale implementation is postponed indefinitely.
