ACER forecasts EU’s smaller than estimated H₂ consumption by 2030

The European Union Agency for the Cooperation of Energy Regulators (ACER) has published its first hydrogen monitoring report, finding that the H₂ market has not a developed a strong enough demand to reach its strategic goal of 20 Mt renewable hydrogen consumption by 2030. The report details how the current EU H₂ market has a series of challenges that may impede the achievement of the Union’s 2030 strategic goals, mainly a low demand for renewable and low-carbon H₂ (with a slow increase rate), a limited electrolyser capacity (with few advancements and an insufficient planned capacity), high production costs of renewable H₂ (3 to 4 times higher than blue H₂ produced from natural gas) and uncertainty around demand threatening the development of planned H₂ infrastructure. 

ACER recommends the transposition of EU hydrogen and decarbonised gas laws into national laws with measures for their implementation, to increase renewable hydrogen’s cost competitiveness by speeding up the deployment of electrolysers and the decarbonisation of the electricity sector, to consider incremental infrastructure development based on market needs in a context of uncertain demand to avoid over-investments and reduce costs, as well as considering the repurposing of gas networks for H₂ to minimise costs, all of this to address risks in financing H₂ networks and increase market certainty. 

The EU aims to install at least 40 GW of electrolysers, to produce 10 Mt and import 10 Mt of renewable hydrogen in the EU by 2030. The EU also targets to increase industrial hydrogen consumption with renewable H₂ to 42% by 2030 and 60% by 2035.