HOPES OF GREEN HYDROGEN INDUSTRY DASHED – As sector struggles with high costs
Green hydrogen developers are scaling back or cancelling projects globally, citing high costs and unrealistic expectations. Once hailed as a key low-carbon fuel for hard-to-electrify industries like steelmaking and long-haul transport, green hydrogen is proving economically unviable for many.
Peter Schniering, CEO of German think tank Future Cleantech Architects, said the fuel was “over-promised,” noting that while hydrogen is valuable as a chemical, it’s inefficient and costly as a fuel. Producing it requires large amounts of clean electricity, which remains in short supply as other sectors also pursue electrification.
Governments including Germany, the UK, Japan, and Australia had backed green hydrogen through subsidies and strategic plans. But with current production costs exceeding €150 per megawatt hour—compared to €30–€35 for natural gas—the fuel remains out of reach for many manufacturers.
Dirostahl, a German forging firm reliant on gas-fired furnaces, has found green hydrogen unaffordable, with CEO Roman Diederichs highlighting the vast price gap. Compounding the issue are storage and transport challenges, as hydrogen requires special infrastructure and can leak easily.
Several European nations are now retreating from earlier goals. Italy has redirected over €600 million in post-pandemic funds from hydrogen to biomethane. France and Portugal have also lowered their 2030 electrolysis capacity targets by more than 30% and 45%, respectively.
