ACER’s 2025 European hydrogen markets Monitoring Report looks at the latest sector developments and highlights the main regulatory and market challenges for the EU.

This year’s edition shows progress in electrolysers build-out and in advancing the EU’s regulatory framework. Yet, renewable hydrogen costs in 2024 remained four times higher than those of conventional hydrogen. This cost gap, together with incomplete national transposition of EU rules, is hindering market development. To overcome this, lower regulatory risks and more targeted funding are needed. 

What are the key findings? 

• Market growth remains insufficient to meet EU and national targets. Despite a 51% increase in electrolyser capacity to 308 MW in 2024, deployment remains way behind the 6 GW target for 2024 and 40 GW for 2030.
• Renewable hydrogen remains costly (four times higher than hydrogen from fossil fuels), with uncertain near to mid term cost reduction prospects.
• Delays in transposing EU rules at national level persist. Only 2 Member States have transposed the amended Renewable Energy Directive.
• A decarbonised electricity sector is key to renewable hydrogen. Electricity supply costs (excluding grid tariffs) may account for up to 50% of renewable hydrogen’s production costs.
• Rising electricity network tariffs may add pressure on costs. ACER’s 2024 Monitoring Report on electricity infrastructure development shows that electricity network costs could rise by 50-100% by 2050, also depending on how investments will align with evolving electricity grid demand. As electricity tariffs represent a significant share of renewable hydrogen’s production costs, this trend poses a substantial risk.
• Network development should align with evolving demand to reduce forecasted risks. Hydrogen networks are key to expanding the market, but infrastructure should be built gradually to match actual demand development.
• Low-carbon hydrogen could support market development, yet cost and technical uncertainties should be carefully assessed.
• The European Commission has already allocated over €20 billion to hydrogen through various programmes, and Member States have announced numerous additional support schemes. Accelerating the allocation of funding to advanced projects is key to increasing scale-up.

What are ACER’s recommendations?

• Accelerate the national transposition and implementation of the amended Renewable Energy Directive to ensure regulatory certainty and accelerate market development.
• Implement the (2024) Hydrogen and Gas Decarbonisation legislative package without delay to facilitate the deployment of infrastructure and a well-functioning hydrogen market.
• Prioritise and target funding towards projects in hard-to-abate sectors that are ready to transition to renewable and low-carbon hydrogen.
• Facilitate renewable hydrogen production through faster permitting and grid connection for both electrolysers and renewable electricity projects.
• Speed up decarbonisation of the power sector to lower electricity costs and enhance electrolyser utilisation.
• Enable flexibility in the electricity market, rethink electricity grid tariffs and grid incentives, as they can optimise electrolyser location and performance.
• Assess the risks of methane-based low-carbon hydrogen, including its underlying costs, infrastructure uncertainties and lock-in effects.
• Align hydrogen network development with market realities to manage market uncertainties and reduce the risk of stranded assets.

What’s next?

Register for ACER webinar: Progress in Europe’s hydrogen markets (Tuesday 9 December 2025 at 11:00 CET).

The Energy Trading Enforcement Forum (ETEF) is the forum where energy and financial regulators and the two EU Agencies (ESMA and ACER) meet annually.

At its 8th forum in Paris on November 6, the main topics discussed included trends in manipulative behaviour based on algorithmic trading and the first referrals from National Competent Authorities to prosecutors for market abuse involving energy products classed as financial instruments. 

The forum also covered the importance of data sharing and the continued cooperation between authorities, as the regulatory oversight of potential market abuse in the trading of energy and financial products falls under two EU regulatory frameworks: the Wholesale Energy Market Integrity and Transparency (REMIT) and the Market Abuse Regulation (MAR).

For more information on the work of ACER and ESMA to protect energy and financial markets from abuse, visit the dedicated pages on the ACER and ESMA websites.

ACER and CEER’s 2025 Monitoring Report analyses how retail electricity markets can contribute to unlocking consumer flexibility in the context of the energy transition.

Consumers’ active participation in retail electricity markets can help Europe accelerate the transition to clean energy. However, the potential of this consumer (also called demand-side) flexibility remains largely untapped due to the uptake of inflexible contracts, uneven smart meter rollout and limited competition in some retail markets.

What are the regulators' key findings? 

• While retail electricity prices have stabilised, lower wholesale prices were not fully passed onto consumers mainly due to inflexible contracts.
• Inflexible contracts that protected consumers during the crisis are now leaving many households tied to contracts above prevailing wholesale market prices.
• The uptake of dynamic and time-of-use contracts is limited in most Member States; inflexible contracts remain dominant.
• Smart meter rollout and data accessibility progress unevenly across the EU.
• Households with higher electrification potential (e.g. owners of electric vehicles or with solar PVs) can provide greater flexibility and achieve larger savings, provided that appropriate contract structures and tools are in place.

What are the main recommendations? 

• Complete the rollout of smart meters and ensure consumers and authorised third parties have standardised and secure access to consumption data.
• Facilitate dynamic and time-differentiated offers.
• Phase out general price interventions while maintaining targeted support for vulnerable consumers.
• Encourage competition and innovation in retail markets to expand consumer choice and engagement.

A retail market that reflects market conditions and provides clear, timely price signals can help consumers contribute to a more efficient, affordable and decarbonised electricity system.

This report is complemented by ACER’s other retail monitoring products, including country sheets (electricity and gas) and a retail pricing dashboard.

Have you heard? ACER is looking for its next Director to run ACER. 

This isn’t just any job

The Director heads ACER, the EU Agency for the Cooperation of Energy Regulators, and plays a key role in driving secure, sustainable and efficient energy markets across the EU. This helps EU competitiveness and security of supply.

The successful candidate will lead a highly skilled multicultural team at ACER’s headquarters in Ljubljana, Slovenia. Beyond managing the Agency, the Director will shape its strategic direction at a time when Europe’s energy system is undergoing profound transformation, and help empower generations towards a clean energy future. They will work closely with national energy regulators, EU institutions and a wide range of stakeholders.

The mandate is for five years, with the possibility of a five-year extension.

Applications are open until 9 December 2025 (noon Brussels time).

ACER is an equal opportunities employer and welcomes applications from all qualified candidates, with particular encouragement for women to apply.

See the vacancy notice for full details and instructions on how to apply. 

Help us spread the word!

Know any potential candidates? Send them this article or share our LinkedIn post with your networks.

On 6 November 2025, ACER received the European Network of Transmission System Operators for Electricity' (ENTSO-E’) s proposal to amend the European Resource Adequacy Assessment (ERAA) methodology. On 17 November, ENTSO-E complemented its submission by providing the results of their public consultation on the topic (summer 2025).

What is the methodology about?

The ERAA, mandated by the Clean Energy Package (2019), is ENTSO-E’s annual assessment of the EU’s electricity supply adequacy for the next decade. Its purpose is to evaluate whether the EU has sufficient electricity resources to meet future demand and to identify potential risks to security of supply. Each year, the assessment is subject to ACER approval.

At national level, Member States define their own reliability standards (based on ACER’s methodology), to set the level of security of electricity supply they require. The ERAA annual assessment provides a consistent, objective tool to evaluate adequacy risks against those standards and whether the introduction of national measures (such as capacity mechanisms) is needed.

Why amend the methodology?

As part of the Electricity Market Design reform (2024), the European Commission was tasked with assessing ways to streamline and simplify the capacity mechanisms’ approval process. The Commission’s streamlining report (March 2025), included a request for ACER to amend the ERAA methodology. ACER subsequently required ENTSO-E to propose the necessary amendments to ensure the ERAA is aligned with the Commission’s streamlining report.

In August 2025, the Commission also adopted the Clean Industrial State Aid Framework, which introduces a fast-track process for approving capacity mechanisms. To support this framework, the ERAA methodology needs to define the procedure for calculating, within the ERAA annual process, the parameters necessary for Member States to make use of the fast-track approval process.

What are the main amendments?

The amendments to the ERAA methodology focus on:

1.  Supporting capacity mechanism approvals                                                                                            

• Introducing capacity mechanism parameters derived from the ERAA model, which Member States may use to benefit from the fast-track process.

2.  Simplifying the methodology 

• Focusing the model on key target years (instead of explicitly modelling every year of the next decade).
• Streamlining how Member States’ efforts to avoid regulatory distortions or market failures are represented in the ERAA.

3.   Improving adequacy modelling 

• Developing a new Trends and Projections scenario to better reflect the actual pace of the energy transition.
• Improving the modelling of investors’ risk aversions and introducing a more realistic representation of flexible resources (e.g. batteries and demand response)’ business case.

What are the next steps?

ACER aims to decide on the methodology by February 2026. 

ACER’s REMIT Quarterlies provide updates on the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) and related activities, including insights into the 2024 revision of the REMIT Regulation to help stakeholders stay informed on changes that enhance transparency and integrity in the European energy market.

What is in the latest REMIT Quarterly?

The 42nd edition covers the third quarter of 2025 and provides details about the upcoming workshop on REMIT implementation updates, scheduled for 28 November 2025. 

The report also includes:

• ACER’s ongoing preparatory work on data reporting under the revised REMIT, pending finalisation of the revised Implementing Regulation.
• Key takeaways from Expert Groups’ meetings in September and October on Wholesale Energy Market Data Reporting and Wholesale Energy Market Integrity and Transparency.
• Updated datasets in ACER's REMIT Data Reference Centre, now including information up to September 2025.
• An update on market surveillance, with statistics on 444 REMIT breach cases under review at the end of Q3.
• A summary of market activity, showing a year-on-year increase in trading on Organised Market Places, driven by growth in natural gas forward markets.