This is an extract from a recent report “European hydrogen markets 2025: Monitoring Report” published by the European Union Agency for the Cooperation of Energy Regulators. 

Despite numerous project cancellations and postponements, including some striking ones, the European hydrogen sector has seen notable progress. Electrolyser deployment has grown substantially, and many new projects are now under construction or approaching maturity. Nonetheless, efforts must accelerate significantly to achieve the long-anticipated scale-up needed to reduce costs and enable broader market development.

EU-wide developments 

Low-carbon hydrogen

The EU hydrogen strategy prioritises the use of renewable hydrogen, while acknowledging that low-carbon hydrogen will play a role “to rapidly reduce emissions from existing hydrogen production and support the parallel and future uptake of renewable hydrogen”. The Commission’s 2025 Clean Industrial Deal communication acknowledged the importance of lowcarbon hydrogen and the need for a pragmatic and clear rule set for its production providing certainty to investors. On 8 July 2025, the Commission adopted the Delegated Regulation on the Calculation of Greenhouse Gas (GHG) Emission Savings for Low-carbon Hydrogen (Low-carbon Hydrogen Delegated Regulation). The European Parliament approved the Low-carbon Hydrogen Delegated Regulation on 23 October 2025. The purpose of the Low-carbon Hydrogen Delegated Regulation is to establish a harmonised framework for assessing the climate performance of low-carbon hydrogen, aligned with the methodologies applied to renewable hydrogen. The regulation covers full life-cycle emissions, including indirect and upstream methane emissions. The Low-carbon Hydrogen Delegated Regulation foresees additional assessments on the treatment of low-carbon electricity from nuclear power plants and the possible use of average emission values for electricity. Both assessments are to be carried out by 1 July 2028. To provide more clarity on this issue, as part of the above-mentioned assessment process, the Commission will launch a public consultation in 2026 on the draft methodology on the use of power purchase agreements (PPAs) for nuclear energy.

The EU Clean Industrial Deal

Following the adoption of the Clean Industrial Deal on 26 February 2025, the Commission has issued a series of action plans, recommendations, and guidance documents to support industrial decarbonisation and competitiveness. Some of these acts have direct or indirect implications for the hydrogen market. 

• Clean Industrial Deal State Aid Framework (CISAF): Adopted on 25 June 2025 by the Commission, CISAF provides a flexible and targeted State aid framework to accelerate industrial decarbonisation. The new framework prioritises support for renewable hydrogen in line with the EU hydrogen strategy, while acknowledging the role of low-carbon hydrogen. 

• Steel and metals action plan: Recognising the steel and metal sector as pivotal for hydrogen uptake, the steel and metals action plan highlights hydrogen’s role in decarbonising the sector and addresses the challenges around (hydrogen and electricity) grid access and development.

• Recommendation on tax incentives: This non-binding guidance encourages Member States to introduce tax credits and accelerate depreciation to stimulate private investments in clean technologies, consistent with CISAF. Eligible investments include hydrogen technologies, like electrolysers, and fuel or feedstock switching solutions in industry. 

EU Hydrogen Mechanism

In July 2025, the Commission launched the EU hydrogen mechanism on its Energy and Raw Materials Platform to accelerate the creation of the hydrogen market. The mechanism will be in place initially until 31 December 2029, and its continuation will be re-assessed thereafter. The mechanism is specifically tailored to the market of RFNBO and low-carbon hydrogen, and hydrogen derivatives like ammonia, methanol and sustainable aviation fuels. The initiative focuses on the following three main objectives. 

• Scaling up of hydrogen production by helping buyers and suppliers connect via organised calls for interest where demand requests will be matched with supply offers. The first call for interest to connect buyers and suppliers was launched in 12 November 2025. 

• Providing insights to guide infrastructure development based on actual market needs by “hosting” market tests, potentially with other interested institutions like network operators and infrastructure developers. 

• Linking interested parties with available financial support (e.g. lending institutions) with project promoters by making relevant information available and matching financial tools to projects.

European Network of Network Operators for Hydrogen

The European Network of Network Operators for Hydrogen (ENNOH), foreseen by the hydrogen and gas decarbonisation Regulation, is the association of European hydrogen transmission network operators. Its mission is to promote the development and integration of the EU hydrogen market, including cross-border trade, and the efficient and sustainable operation of the European hydrogen transmission system in line with EU climate and energy goals. ENNOH’s main tasks include drafting EU network codes on hydrogen related matters. ENNOH is also responsible for preparing the EU-wide ten-year network development plan (TYNDP) for hydrogen infrastructure.

On 25 June 2025, the future hydrogen transmission network operators adopted ENNOH’s statutory documents, reflecting the Commission’s opinion on these documents and marking a key step in its creation. ENNOH’s formal establishment depends on the certification of HNOs under Article 71 of the hydrogen and gas decarbonisation Directive, as only certified operators may become members. Member States are therefore urged to transpose the Directive before the formal 5 August 2026 deadline, to enable timely certification and avoid delays that would hinder ENNOH’s operational start and its role in developing key hydrogen market deliverables. The expectation is that ENNOH will become fully operational in 2026, when the first certified HNOs will formally establish the organisation. Until then, the future HNOs have set a temporary, voluntary cooperation, called pre-ENNOH, to pave the way for the timely undertaking of its activities and ensure collaboration between future HNOs.

Certification of renewable and low-carbon hydrogen

Certification allows renewable and low-carbon hydrogen producers to demonstrate compliance with the sustainability criteria in the delegated acts for RFNBO and low-carbon hydrogen. As such it is an essential enabler of hydrogen trade both within the EU and with third countries. Certification can be obtained via national schemes, administered by national competent authorities, or through privately developed international voluntary schemes recognised by the Commission. As of September 2025, three voluntary schemes, CertifHy, REDcert, and International Sustainability & Carbon Certification (ISCC EU), have received formal recognition by the Commission and are operational across Member States. These schemes have already enabled certification of RFNBO production in several jurisdictions, granting certified producers a competitive advantage in the evolving European and global hydrogen market.

National developments

National strategies and plans

In November 2024, Italy published its final hydrogen strategy. The strategy is structured around a framework that considers three possible scenarios developed over a long-term horizon, up to 2050. For 2030, it estimates a moderate demand for renewable hydrogen of around 250,000 tonnes driven mainly by European policies, while for 2050, renewable hydrogen demand is estimated between 2.2 and 4.2 million tonnes, depending on the scenario. In terms of hydrogen supply, the strategy re-iterates the scenario of the NECP in which 70% of the hydrogen is produced domestically. While the final version of the strategy does not mention specific targets on electrolyser capacity, it refers to a potential need for 15 GW to 30 GW of capacity, considering the NECP scenario. To account for limitations in developing the necessary RES supplying the electrolysers domestically, an alternative scenario considers that around 80% of the demand would come from imports mainly from North Africa via the Southern Hydrogen Corridor, but also via ammonia and methanol shipments from other parts of the world. While the strategy reiterates the vision of connected hydrogen hubs and the strategic importance of the Southern Hydrogen Corridor, it refrains from quantifying the foreseen infrastructure needs.

In April 2025, France published an updated hydrogen strategy. The strategy considers the current pace of developments in the sector and adopts a more conservative approach compared with the previous version of the hydrogen strategy published in 2020. The new strategy prioritises the deployment of hydrogen in industrial hubs (focusing on refining, chemicals, ammonia, and the steel industry) and in the transport sector with a focus on synthetic fuels for aviation and maritime. According to the strategy, France plans to rely entirely on domestic hydrogen production until 2035. The target for electrolysers has been downgraded to 4.5 GW in 2030 and 8 GW in 2035, from 6.5 GW and 10 GW, respectively. Imports of hydrogen derivatives, mainly ammonia, are expected to begin after 2040. The strategy also advocates for a more gradual roll-out of hydrogen networks and foresees the building of 500 km of hydrogen pipelines in the mid-term, mainly within industrial hubs, but also with a view of connecting those hubs as appropriate. The actual network and storage needs will be identified in a study expected to be finalised towards the beginning of 2026. The strategy also refers to the support planned to assist the development of the early market. Two concrete mechanisms are mentioned, one focusing on tax incentives for the transport and refining sectors, and one focusing on levelling out the cost of electrolytic hydrogen by supporting up to 1 GW of electrolyser capacity.

In October 2025, Romania adopted its National Hydrogen Strategy 2025-2030 with a perspective of 2050 and an Action Plan for its implementation. The strategy and action plan align with the relevant objectives included in National Sustainable Development Strategy 2030, Romania’s plan to align with the UN’s 2030 Agenda for Sustainable Development. It includes specific actions and measures to support the decarbonisation of hard-to-decarbonise economic sectors, mainly in transport and heavy industry, focusing on new, innovative solutions. The strategy and action plan aims primarily on the production of renewable hydrogen, without overlooking lowcarbon hydrogen especially considering affordability concerns. It also advocates for the use of hydrogen for energy security purposes and for further enhancing the integration of RES though power-to-x application. The strategy and action plan foresees the production of 153,000 tons of renewable hydrogen by 2030, mainly for transport (72,400 tonnes) and heavy industry (57,000 tonnes in existing processes and 23,700 tonnes in new applications, in line with the RED III industrial hydrogen RFNBO target of 42%). By 2027, the strategy and action plan expects the production of 48,700 tonnes. To reach this target, the it foresees 2,130 MW of electrolysers by 2030, powered by an additional 4,261 MW of dedicated wind and solar power capacity.

The new French, Italian and Romanian strategies lead to a reduction of the cumulative capacity of electrolysers targeted for 2030 by national strategies compared with the 2024, bringing it to 48-54 GW. As shown in Figure 1, while the cumulative Member States’ targets aim higher than the targeted electrolyser capacity in the European hydrogen strategy (40 GW), the estimated production is significantly lower than the 10 million tonnes of the latter.

National hydrogen policies

In September 2025, Austria unveiled a roadmap for the expansion of the hydrogen sector. The strategy includes measures to strengthen long-term supply security through a new import framework, alongside targeted investments in electrolysis capacity and expansion of storage and pipeline infrastructure. To support implementation, the government plans to issue two ordinances before the end of 2025. The Hydrogen Investment Grant Ordinance will provide EUR 20 million in funding for electrolysers, while the Hydrogen Certification Ordinance will align national legislation with EU requirements, aiming to create regulatory certainty and eligibility for funding. According to the roadmap, the Southern Hydrogen Corridor, linking Austria with North Africa via Italy, is set to make Austria a European hydrogen hub.

On 29 May 2024, the German government accepted the draft Hydrogen Acceleration Act. The draft act failed to pass through the Parliament, however the government adopted an updated proposal and sent it to the Parliament for ratification. The proposal aims to create a simplified and accelerated framework for the planning, approval, and procurement procedures for hydrogen infrastructure projects, including electrolysers, using digitalised administrative procedures and classifying hydrogen projects as projects of overriding public interest. 

In April 2025, Germany published a White Book on Hydrogen Storage. The book analysed the future needs for hydrogen storage based on various scenarios and expects 2-7 TWh (60 – 210 kt) of demand for storage by 2030 and 76-80 TWh (2.2-2.4 Mt) by 2045 driven mainly by industry and the electricity sector. According to the analysis, this would amount to EUR 32.5-54.2 billion worth of investment by 2050 and would account for one-quarter to one-third of the forecasted total European hydrogen storage demand. The book considers that Germany’s existing gas salt cavern storages converted into hydrogen storage have the greatest potential and fastest possible development time. 

On 15 September 2025, the German Federal Ministry for Economic Affairs and Energy presented a monitoring report on the energy transition. The report highlights the gaps in the energy transition scenarios and stresses the importance of a pragmatic approach based on realistic demand scenarios. The report identified 10 key measures in this respect, including the elimination of overly complex requirements for renewable hydrogen, and the equal treatment of low-carbon hydrogen. The report proposes a gradual approach for the development of the hydrogen core network and the hydrogen import corridors, in close coordination with demand side measures. It also recommends switching from the current targets on electrolyser capacity to flexible targets based on demand-side projects. The report proposes the classification of carbon capture utilisation and storage (CCUS) as a climate protection technology, enabling investment funding and regulatory guidance for CO2 infrastructure. In line with the proposed measures, the German government introduced a draft law facilitating the transport and storage of captured CO2 by creating the legal framework for CO2 pipelines and storages.

National regulatory developments

The latest amendment of the Renewable Energy Directive (RED III) sets, inter-alia, binding minimum levels for RFNBOs for industry and transport for 2030 (and for industry also for 2035). As such it is one of the fundamental regulatory instruments for the early uptake of hydrogen in those sectors. Member States had to transpose the targets into national legislation by 21 May 2025. By the time this report was drafted, only Denmark and Ireland had notified complete transposition of the Directive to the Commission. According to information from the NRAs, and as depicted in Figure 2, the transposition is ongoing in 15 Member States. The Commission has sent Letters of formal notice for non-communication regarding the provisions of the amended RED, which have a May 2025 deadline, to all Member States, except Denmark, giving them a two-month period to reply, complete their transposition, and notify their measures to the Commission. In the absence of a satisfactory response, the Commission may decide to issue a reasoned opinion.

Note: In Belgium, the government launched a public consultation on a proposed legislation to transpose the RED III RFNBO targets for the transport sector. In Czech Republic, the legislation has been approved but not put in force yet. In Finland, transposition of the RED III targets for transport is in place but not for industry. In Portugal, RED III was partially transposed by Decree-Law 99/2024, of 3rd December 2024. On 25 September 2025, the Portuguese government launched a public consultation on the legislation for the full transposition of RED III, which ended on 25th October 2025. In Romania, the transposition is ongoing, and relevant legislation has been adopted in October 2025 (Government Emergency Ordinance no. 59/2025 amending and supplementing Government Emergency Ordinance No. 163/2022). In Spain, a draft Royal Decree on renewable fuels, was under public consultation until 8 September 2025.

The hydrogen and gas decarbonisation Directive is another substantial tool for the hydrogen market development. While the deadline for Member States to transpose the Directive into national legislation is 6 August 2026, the hydrogen sector would significantly benefit from an earlier transposition. Empowering NRAs to undertake the tasks foreseen in the hydrogen and gas decarbonisation package early on would ensure that regulatory oversight is in place from the start of the market development. According to information received from NRAs, so far Denmark and Poland have formally proceeded with the transposition of the Directive, while Austria, Belgium, Bulgaria, Czech Republic, Finland, Germany, Latvia, Malta, the Netherlands, Portugal, Romania, and Spain are in the process of doing so. 

Regardless of the transposition of the hydrogen and gas decarbonisation Directive, in 13 Member States there is already a regulatory framework in place or under development. NRAs have already obtained some legal competences in Belgium, Denmark, Germany, Luxembourg, Poland, Portugal, and Spain. As far as the unbundling process is concerned, as of April 2024, Fluxys Hydrogen has been appointed and certified as HNO in Belgium according to national legislation, prior to the publication of the hydrogen and gas decarbonisation package. A re-certification is currently ongoing to fully align with the Directive’s requirements. In a few other Member States (Denmark, Germany, the Netherlands, Poland, Portugal, and Spain) interested HNOs have been identified, and in some cases appointed, but no formal certification has taken place yet, due to the absence of an appropriate regulatory framework.

Note: The figure indicates Member States with a regulatory framework setting basic rules such as allocation of roles and high-level rules for access to hydrogen networks. The figure does not imply that the hydrogen and gas decarbonisation Directive has been properly transposed in Member States with a hydrogen framework in place.

As the market gradually grows, there is a need to develop market rules that govern the use and operation of the hydrogen network. Germany is a front-runner, reflecting its high ambitions, but other Member States are following. Denmark is also developing a financing framework and is working on the access rules for the hydrogen network, while Belgium is currently analysing options for the market design.

Access the report here