EU’s ambitious hydrogen targets face realpolitik hurdles as import dependency looms

Industry groups and government data show the European Union is falling short of the hydrogen roll-out it says is central to decarbonising heavy industry, and stakeholders are urging a fundamental reset of policy if the bloc is to meet its 2030 ambitions.

According to Hydrogen Europe, current trajectories leave the EU “way off” the target of 10 million tonnes of renewable hydrogen per year by 2030, with domestic production projections covering only a fraction of expected demand. Independent market analysis published by Argus Media similarly warns that EU renewable hydrogen production could reach only about 1.4 million tonnes by 2030 against potential demand of roughly 2.8 million tonnes driven largely by transport mandates, implying a substantial reliance on imports.

The European Commission’s hydrogen strategy, framed under the Green Deal and REPowerEU, set the 2030 objective of producing and importing 10 million tonnes annually and targeted 40 GW of electrolysers by that date. The strategy positions hydrogen as essential to decarbonising steel, chemicals, cement and certain transport segments, and as a tool to reduce energy dependence on particular external suppliers. The Commission still regards large-scale deployment as a critical enabler of climate neutrality, but stakeholders say delivery mechanisms are inconsistent with the scale and investment certainty the sector needs.

Germany illustrates the tension between ambition and reality. The Federal Audit Office has concluded that green hydrogen supply and demand in Germany have underperformed expectations and warned the country risks missing its 2030 climate goals. Government planning reflects a pragmatic acceptance of imports: Germany’s Import Strategy, published in July 2024, estimates national hydrogen needs of 95–130 TWh by 2030 and foresees 50–70% of that being imported. By 2045, planners project demand of 360–500 TWh for hydrogen and a further 200 TWh for derivatives.

That import dependency is not merely theoretical. Industry data and trade plans show countries are already negotiating supply partnerships and signalling to investors the importance of cross-border projects. The German government’s intention to underwrite projects at home is visible in sector-specific funding commitments: the government has announced plans to provide €55 million towards ArcelorMittal’s hydrogen-based direct reduced iron plant in Hamburg, a project the company says will start production in 2025 and aims to produce over one million tonnes of zero-carbon steel annually by 2030. Such projects demonstrate the potential for industrial offtake to anchor supply, but they remain isolated relative to the scale implied by the EU’s 2030 target.

Industry groups and think-tanks argue the shortfall stems from three policy weaknesses. First, the current regulatory framework and market design provide insufficient long-term revenue certainty for capital-intensive electrolysis and transport infrastructure. Second, many member states have been reluctant to impose binding hydrogen capacity or consumption mandates on incumbents, slowing predictable demand signals that would mobilise investment. Third, certification and permitting regimes, while recently advanced with a European Parliament approval of a low-carbon hydrogen certification framework, remain complex and inconsistent across jurisdictions, slowing project development timelines.

Clean Hydrogen Observatory analysis adds technical texture: the EU’s roadmap envisaged staged deployment, 6 GW of electrolysers and 1 million tonnes of renewable hydrogen by 2024, ramping to 40 GW and 10 million tonnes by 2030, but achieving those phases requires faster grid integration, streamlined consenting, and scaled electrolyser manufacturing that have yet to materialise at the required pace.

For industrial decarbonisation policymakers and corporate buyers, the implications are stark. If domestic production cannot be scaled in time, import reliance will grow, exposing industries to geopolitical and price risks unless the EU secures diverse, long-term supply contracts and builds compatible port, storage and pipeline infrastructure. Conversely, a calibrated package of measures, clear demand-side mandates or offtake guarantees, accelerated permitting, targeted public finance to derisk early projects, and harmonised certification, could restore investor confidence and accelerate roll-out.

Some progress is visible: EU-backed projects in the Baltic and other regions have secured financing and political backing, and high-profile industrial projects such as ArcelorMittal’s plant show that large-scale hydrogen-based industrial decarbonisation is technically and commercially feasible where public and private actors coordinate. Yet industry groups argue these examples are not yet replicable at the scale required.

The coming months will test whether EU and national policymakers translate strategic targets into the practical, investment-grade frameworks the hydrogen economy requires. For companies engaged in industrial decarbonisation, the choice is to press for clearer mandates and bankable instruments now, or to prepare operations for a future where hydrogen supply is predominantly imported and subject to external market and geopolitical dynamics.