EU Greenlights Nearly €1 Billion for Green Hydrogen Projects

The European Union (EU) has approved €992 million in funding for 15 renewable hydrogen projects in 5 countries across the European Economic Area. This investment, under the EU Innovation Fund, is a key part of Europe’s clean energy strategy.

The projects aim to produce about 2.2 million tonnes of green hydrogen over the next decade, helping to cut over 15 million tonnes of CO₂ emissions. The focus is on heavy industry and transport. These sectors are tough to decarbonize using regular clean energy solutions.

Why Green Hydrogen Matters in the Energy Shift

Green hydrogen forms when renewable electricity drives electrolysers. These devices split water into hydrogen and oxygen. This process does not produce any direct greenhouse gas emissions, unlike grey hydrogen, which comes from fossil fuels.

green hydrogen production — Source: Shutterstock

Green hydrogen is a clean option for industries that can’t easily use electricity. This includes steel production, aviation, shipping, and chemicals.

The high price of electrolysers and changing renewable electricity costs make it tough for green hydrogen to compete with fossil-based hydrogen. That’s why the EU’s direct financial support is critical. It helps lower the cost difference and speeds up the adoption of clean hydrogen technologies.

Environmental Gains from Funded Projects

The 15 projects backed by the EU will avoid over 15 million tonnes of CO₂ emissions by 2033. That’s roughly the same as taking 9 million cars off the road for a year. These projects are expected to generate 2.2 million tonnes of renewable hydrogen.

For comparison, producing one tonne of hydrogen using fossil fuels emits about 6.3 tonnes of CO₂.

Green hydrogen will help reduce emissions from hard-to-abate sectors. These sectors contribute a significant portion of Europe’s greenhouse gases. Globally, hydrogen production—mostly from fossil fuels—releases nearly 900 million tonnes of CO₂ each year. If green hydrogen replaces that, it could eliminate an important source of emissions.

EU renewable hydrogen projects — Source: EU

Boosting EU Energy Security

More than 70% of Europe’s energy is imported, most of it in the form of fossil fuels. Supporting local renewable hydrogen production helps the EU rely less on imported energy. This boosts energy security.

Electrolysers can use local wind or solar power, which means hydrogen can be made closer to where it’s used. This cuts transmission costs and prevents supply chain issues from global politics or market changes.

Developing green hydrogen also adds stability. It allows the EU to better manage global energy shocks and cut exposure to changing oil and gas prices.

Building a Competitive Hydrogen Market

This funding round is part of a wider EU plan to grow a €100 billion clean economy by 2030. The REPowerEU strategy aims to produce 10 million tonnes of renewable hydrogen domestically and import an additional 10 million tonnes by 2030. This makes hydrogen a key part of the EU’s energy transition and decarbonization goals.

The European Hydrogen Bank (EHB) will hold its next auction in late 2025, offering another €1 billion to green hydrogen developers. These auctions promise a set payment for each kilogram of hydrogen produced over 10 years, which helps companies feel secure in their investments.

Hydrogen-related investments are growing globally. The International Energy Agency (IEA) expects that more than €150 billion will be invested in hydrogen annually by 2030.

The EU’s funding structure helps lower costs and expand electrolyser manufacturing. Grants for individual projects go from €8 million to €245 million. Bigger amounts are available for tough areas like maritime shipping.

Each project must reach financial close within 2.5 years and start operations within five years. Many will back the production of chemicals like methanol and ammonia. Hydrogen plays a key role here. It can work as both an energy source and a raw material.

RELATED: Shipping Toward Net Zero: Maritime Turns to Green Hydrogen and Ammonia

Jobs, Innovation, and Export Opportunities

The green hydrogen economy will create up to 1.4 million jobs by 2030. This is according to the European Renewable Energy Council. It also offers environmental benefits. These include jobs in engineering, manufacturing, logistics, and maintenance.

The EU also expects new hydrogen hubs to encourage innovation, similar to how the solar and wind industries grew. The Innovation Fund helps European businesses develop the entire supply chain. This includes everything from raw materials to energy management software.

Countries in Asia and North America are investing heavily in clean energy, and Europe’s early moves may offer a strong competitive edge.

Cross-Border Collaboration for a Unified Hydrogen Market

One of the key goals of the EU hydrogen strategy is to create a unified hydrogen market across member states. Many funded projects have cross-border elements. They connect producers, pipelines, storage, and end-users across national lines.

This integration is key. It balances hydrogen supply and demand. Countries with extra renewable power, like Spain and Portugal, can help those with high industrial needs, like Germany and the Netherlands. It supports building trans-European hydrogen corridors, which allow for large-scale transport and trade of renewable hydrogen across borders.

The EU is enhancing cross-border infrastructure. This builds a more flexible and connected energy system. It supports electricity networks and lets hydrogen move to where it’s needed most.

Public-Private Partnerships Are Paving the Way

Many EU Innovation Fund projects depend on strong partnerships. These partnerships involve governments, private companies, and research institutions. They combine technical skills, funding, and policy support, speeding up deployment.

Some winning projects show energy companies teaming up with electrolyser makers and local utilities. Together, they create complete supply chains. Some smaller startups are exploring niche areas. They focus on green hydrogen for uses like fertilizer and aviation fuel.

Challenges Ahead and A Strategic Step Toward a Greener Europe

Despite the progress, there are still hurdles. Electrolyser production needs to grow a lot. Also, renewable electricity capacity has to increase to satisfy hydrogen demand. Storage, transport, and end-use systems also need to be built quickly.

Many developers say that long permitting timelines and unclear rules slow things down. To fix this, the EU plans to launch a Hydrogen Mechanism platform in 2025. It will connect hydrogen buyers and sellers and will lower transaction costs.

Moreover, it will help track emissions better. This platform will make it easier for hydrogen to fit into existing energy systems.

The European Commission’s €992 million investment is more than just funding—it’s a clear signal of strategic direction. With auction-based support, market tools, cross-border coordination, and public-private partnerships, the EU is positioning itself as a global leader in renewable hydrogen.