According to a new report by UnivDatos, the “Europe Green Hydrogen Market” is expected to reach USD 14,374.68 Billion in 2032 by growing at a CAGR of 67.1%.

Mainstreaming green hydrogen

For green hydrogen to be fully cost-competitive with grey hydrogen, its cost must be reduced from €4-5 per kg to a level of €1.5-2 per kg. While this cost gap may seem challenging, it can be broken down into its components and compared to learning rates of similar technologies to reveal a feasible prospect within a 5-10-year time horizon. For example, producing 1200 TWh of green hydrogen would require total investments in the range of €545-690 billion, including €90-105 billion in electrolyzers, €250-300 billion in renewable energy capacity, €30-60 billion in transport infrastructure, and €175-225 billion in the end-use sectors. Electrolyzer production is a largely manual process, where labor costs can account for over 65% of the total costs for alkaline electrodes. By automating the process, significant savings can be achieved. Nel, for instance, is expanding its Herøya plant with a fully automated production capacity.

How Europe Will Win the Race?

Europe has a strong demand for hydrogen, with over 300 TWh being used in the continent, mostly in industrial clusters such as Rotterdam and North Rhine-Westphalia that can serve as "test beds" for green hydrogen. Europe is also the most ambitious region when it comes to decarbonization, with a strong public focus on climate. In terms of innovation, around 50-60% of global hydrogen startups are based in Europe, making the continent an early leader in this field. Additionally, some of the world's leading electrolyzer technology companies, such as Thyssenkrupp, Siemens, Nel, and McPhy, are based in Europe, with a 25-30% global market share in electrolyzer production. These companies are known for producing the highest-quality and most reliable electrolyzers. Europe also boasts the highest number of announced green hydrogen projects, with roughly 1300 KT of annual production capacity announced, second only to Australia, which has 1500 KT.

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Country Analysis

Germany has been actively investing in a green hydrogen economy as it has doubled its green hydrogen production target for 2030 with the implementation of a new national strategy. The country aims to import the excess green hydrogen that will help diversify the import channels and significantly accelerate the level of ambition along with the entire value chain. Moreover, the German government aims to set technical standards for green hydrogen to provide advice on laws and standards and to train specialists. For instance: In 2024, the German Federal Ministry for Economic Affairs and Climate Protection (BMWK), ministers signed an agreement to support the Green Hydrogen Namibia Program, which aims at establishing local hydrogen value chains that benefit the local population, in developing a national strategy for green industrialization and in carrying out environmental impact assessments for green hydrogen projects in Namibia.

United Kingdom has planned to stimulate the production of green hydrogen in the country. Factors that are majorly influencing its growth is the UK government's hydrogen strategy that emphasizes producing low-carbon hydrogen for the country’s future energy independence commitment to achieve net zero emission by 2050. Key players in the country are also working toward the goal by raising investment funding from the government to start the green hydrogen projects. For instance: In 2023, Britain's Energy Security Secretary funded 11 projects to produce green hydrogen, as part of the government's $2.5 billion commitment over the next 15 years. Furthermore, various key players have announced the development of a green hydrogen project that aims to produce fuel for buses, HGVs, trains, and industry in Wales more environmentally friendly manner. For instance: In 2022, Statkraft, Europe’s largest generator of renewable energy, announced the first green hydrogen project in the UK.

Conclusion

In conclusion, the green hydrogen industry in Europe is experiencing significant advancements as electrolyzer costs continue to decrease. This reduction in costs is making green hydrogen more accessible and competitive in the energy market, paving the way for a more sustainable future. European countries are also collaborating with different regions globally to accelerate market growth by sharing resources, technology, and expertise. This collaboration not only promotes the uptake of green hydrogen but also strengthens international partnerships for achieving carbon neutrality goals. With ongoing efforts and investments in the green hydrogen sector, Europe is poised to lead the way in transitioning towards a cleaner and greener energy landscape.

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