European Hydrogen Market 2025 – ACER’s Latest Report Highlights Ambitious Goals and Serious Challenges
The EU Agency for the Cooperation of Energy Regulators (ACER) has published the European Hydrogen Markets – 2025 Monitoring Report, offering the most up-to-date overview of the development of the renewable and low-carbon hydrogen market in Europe.
Key Findings from ACER’s Report
Europe Still Far from Meeting 2030 Targets
Despite a notable 51% increase in electrolyser capacity in 2024, the total installed capacity of 308 MW remains only a fraction of the planned 40 GW by 2030. At the current rate, closing this gap will be extremely challenging without a significant acceleration.
Renewable Hydrogen Remains Too Expensive
The average cost of renewable hydrogen (RFNBO) is around 8 EUR/kg, which is four times higher than hydrogen produced from natural gas (approx. 2 EUR/kg). High production costs continue to slow down both demand and investment activity.
Electricity Costs Are Key to H₂ Competitiveness
Up to 50% of the cost of producing renewable hydrogen comes from electricity. The cheaper and more zero-emission the electricity supply, the more competitive hydrogen becomes for industrial and transport applications.
Hydrogen Infrastructure Is Necessary, but Must Be Built Cautiously
ACER stresses that developing hydrogen transmission networks is essential, yet the process should be gradual and adaptive. Uncertainty around future demand increases the risk of creating stranded assets.
Low-Carbon Hydrogen (with CCS) – An Opportunity with Risks
Low-carbon hydrogen costs around 3 EUR/kg, making it an attractive transitional option. However, risks related to CO₂ transport costs, limited commercial experience, and the possibility of a fossil gas “lock-in” mean that caution is still required.
Funding Is Increasing, but Implementation Is Too Slow
The EU has already allocated over 20 billion EUR in support, yet many projects face delays. Even winners of the European Hydrogen Bank auctions have withdrawn due to regulatory uncertainty and infrastructure bottlenecks.
The Bottom Line: Clear Direction, Insufficient Speed
ACER’s report sends a strong signal to policymakers and industry: Europe understands the direction of the hydrogen transition, but needs faster action, stable regulation, and cheaper clean electricity for hydrogen to play its intended role in the green transformation.
The full ACER report includes detailed recommendations and analysis — a must-read for anyone following the development of Europe’s hydrogen market.