Column: Renewable hydrogen is too expensive. It doesn’t have to be.
Low-cost renewable hydrogen is not just a decarbonisation tool for critical industries — it is essential for Europe’s energy resilience, security, and industrial competitiveness.
Despite its strategic importance and global attention, renewable hydrogen remains too expensive for widespread deployment. Many announced projects are failing to reach final investment decision because the economics don’t add up for developers and investors.
Grey hydrogen today costs €3–4/kg ($3.38-4.51/kg) in Europe, while the levelized cost of renewable hydrogen is €7–10/kg ($7.89-11.28/kg, according to the Hamburg University of Applied Sciences. Legacy electrolyser technology and bespoke plant construction have kept costs unnecessarily high. As a result, more than 99% of hydrogen is still produced from fossil fuels.
Take Germany as an example: the National Hydrogen Strategy targets 10GW of installed electrolyser capacity by 2030 – over 10 times today’s level. Yet studies, including one funded by the German government, show that the country is not on track to meet its target. This pattern repeats across Europe and globally: not enough projects are reaching FID to meet national renewable hydrogen goals.
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