Hydrogen from electricity is growing in the EU, but not fast enough
Hydrogen from electricity is growing in the EU, but not fast enough
What is it about?
Despite hydrogen’s role in EU decarbonisation pathways, investment is held back by high costs, policy uncertainty and, in some sectors, difficulties in securing firm, long-term demand.
ACER’s 2026 Monitoring Report on European hydrogen markets, published today, examines investment in electrolysers (used to produce hydrogen from water using electricity), demand across hydrogen-consuming sectors, infrastructure, public funding and national implementation of EU hydrogen rules.
The report also sets out policy considerations for Member States, the European Commission, national regulators and hydrogen network operators.
What did ACER monitoring find?
Electrolyser capacity is growing from a small base. Electrolyser operational capacity reached 490 MW at the end of 2025, almost six times the 2020 level. Committed projects total 4.2 GW, well below the 30-58 GW envisaged for 2030.
Demand has declined slightly. EU hydrogen demand reached 7.3 million tonnes in 2025, 3% lower than in 2022. Its future will depend on industrial policy choices.
Investment goes where the extra cost can be covered. Renewable hydrogen is still more costly than fossil-based hydrogen. Almost half (49%) of committed electrolyser capacity is in refining, where obligations and penalties apply. Uptake is slower in other sectors.
Public funding helps but does not guarantee investment. Funding can narrow the cost difference, but finding long-term buyers remains a constraint.
Infrastructure is advancing slowly and unevenly. 622 km of new or repurposed hydrogen pipelines were commissioned in the EU between January 2025 and June 2026.
National implementation is lagging. Member States have yet to fully write EU hydrogen rules into national law and apply them.
The future of renewable and low-carbon hydrogen in the EU depends on industrial policy. Decisions on the role of hydrogen-consuming industries will need to balance decarbonisation, competitiveness and resilience.
Want to know more?
ACER will hold a webinar to present the key findings of this report.
When? 1 December 2026 at 10:00 CET.