Green hydrogen or lost leadership? Europe must act before China wins

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🗞️ Driving the news: Europe risks losing leadership in the emerging green hydrogen economy unless it accelerates investment, market design and industrial policy, warns energy expert Dr. Thomas Hillig.

🔭 The context: Ambition meets slow market reality
• The EU has established policy frameworks through the European Hydrogen Strategy and Hydrogen and Decarbonised Gas Market Package
• Implementation across Member States remains uneven, slowing the rollout of production, infrastructure and demand
• Hydrogen systems require coordinated development of pipelines, storage, transport and industrial use — infrastructure that can take five to seven years to build
• Meanwhile, green hydrogen remains significantly more expensive than fossil-based grey hydrogen, limiting voluntary demand

🌍 Why it matters for people and the planet: Green hydrogen is expected to play a key role in hard-to-abate sectors such as steel, chemicals, cement and heavy transport
• Direct electrification often cuts emissions more efficiently today, meaning hydrogen will likely complement rather than replace electrification
• China has rapidly scaled its hydrogen manufacturing ecosystem through coordinated industrial policy
• Without a strong EU market framework, European companies risk losing global market share in electrolyser manufacturing, hydrogen infrastructure and supply chains

⏭️ What’s next: The EU may need stronger financial tools such as contracts for difference and carbon pricing to close the cost gap between green and grey hydrogen
• Strategic clusters linking renewable generation with industrial hydrogen demand could accelerate deployment
• Europe is also expected to develop hydrogen import partnerships with regions such as North Africa and the Middle East to diversify supply
• Initiatives like the European Hydrogen Bank could help stimulate early demand and build market confidence

📈 One stat: China already accounts for more than half of the world’s installed electrolyser capacity, highlighting the scale of competition in the hydrogen industry.

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