EU Accelerates Push For Renewable And Low-Carbon Hydrogen To Achieve Climate Neutrality By 2050

Hydrogen is emerging as a key player in the European Union’s plan for climate neutrality. Currently, most of the hydrogen in the EU is produced from natural gas, which emits a large amount of carbon dioxide. This form is called grey hydrogen. However, the EU is now promoting cleaner alternatives—renewable hydrogen and low-carbon hydrogen. Renewable hydrogen is made by splitting water using electricity from renewable sources like wind or solar, which results in no CO2 emissions. Low-carbon hydrogen is produced using fossil fuels, but with carbon capture and storage technology to reduce emissions.

In 2023, the EU consumed 7.3 million tonnes of hydrogen, which made up about 2% of its total energy use. Most of this was used in oil refineries and in the chemical and ammonia industries. The European Commission aims for renewable hydrogen to meet 10% of the EU’s energy needs by 2050. To reach this goal, the focus must be on reducing production costs and building a strong hydrogen infrastructure.

There are several ways to produce hydrogen, including steam methane reforming, electrolysis, and biological methods. At present, 96% of EU hydrogen is still fossil-based. To make low-carbon hydrogen more climate-friendly, the EU has set a greenhouse gas emissions threshold of 70% savings compared to conventional fuels. A delegated act outlining how to calculate these savings will be adopted by August 2025.

Green hydrogen, produced via electrolysis using renewable electricity, is still more expensive than fossil-based hydrogen. In 2023, the cost of making hydrogen from natural gas with carbon capture was about €3.80 per kilogram, while renewable hydrogen costs between €4.1 and €12.4 per kilogram depending on the country. The high cost is due mostly to electricity prices and capital investment. However, as renewable electricity and electrolyzer costs fall, prices are expected to drop in the future.

Hydrogen can be used to decarbonize many sectors. It can replace fossil fuels in steel production, chemicals, and fertilizer manufacturing. It is also being explored for use in heavy-duty transport, aviation, and shipping. Moreover, hydrogen can be used to store excess renewable electricity and provide backup power when solar or wind energy is not available.

Infrastructure development is still in the early stages. Currently, there are only 1,564 km of hydrogen pipelines in Europe, compared to over 200,000 km of natural gas pipelines. The EU is working on a plan to develop a Europe-wide hydrogen network. It includes repurposing old natural gas pipelines, which can save up to 80% of the cost. The European Hydrogen Backbone project plans to build 31,000 km of hydrogen pipelines by 2030 and 53,000 km by 2040.

The EU is supporting hydrogen through several programs. The European Hydrogen Bank is funding projects, while other tools like the Innovation Fund and Important Projects of Common European Interest (IPCEIs) help finance research and infrastructure. Hydrogen valleys—regional hubs where production and use are integrated—are also being promoted.

The EU’s policy framework for hydrogen is guided by the Hydrogen Strategy adopted in 2020 and new rules passed in 2024. These laws aim to prepare the market for low-carbon and renewable gases and create a separate hydrogen infrastructure system. New targets include having 42% of hydrogen used in industry come from renewable sources by 2030 and 60% by 2035.

Looking ahead, the EU plans to produce 10 million tonnes of renewable hydrogen and import another 10 million tonnes by 2030. However, the European Court of Auditors warns that these goals may be too ambitious without more data and stronger investment support. One challenge is the so-called “chicken and egg” problem—investors hesitate due to uncertain demand, and users delay adoption due to uncertain supply.

Still, hydrogen is expected to become a vital part of the EU’s energy mix. With proper investment, infrastructure planning, and clear regulations, it can help Europe reduce emissions, increase energy security, and support industrial innovation in the years to come.