Last updated: June 20th 2025

EU Hydrogen Strategy under the EU Green Deal

The EU’s hydrogen strategy lays out the European Commission’s vision vis-à-vis hydrogen and its role as an energy carrier in a European integrated energy system. The Strategy considers hydrogen as ‘essential to support the EU’s commitment to reach carbon neutrality by 2050 and for the global effort to implement the Paris Agreement while working towards zero pollution.’ 

Concretely, a broad and central role is envisaged for hydrogen within the energy mix, as it could act as a carbon-neutral energy carrier, enabling back up energy storage capacity for seasonal variations; the substitution of fossil fuels in carbon-intensive industrial processes; the decarbonisation of the hard-to-abate parts of the transport system; and the repurposing of existing natural gas pipelines, avoiding stranded assets.

The Hydrogen Strategy lays out its (legally non-binding) definitions of the various types of hydrogen. These definitions have served their purpose as guiding policymakers in their development of hydrogen ambition and rules, however, they have since been replace by legally binding definitions, including through the RED RFNBO Delegated Acts and the Gas Package’s Low-carbon H2 Delegated Act.

The Strategy sets a priority for the EU to develop renewable hydrogen based on a 3-phase roadmap, quantified production targets and with ‘a full value chain approach’:

Phase 1 (2020-2024): 

  • It aims for at least 6 GW of renewable hydrogen electrolysers by 2024 in the EU (i.e. production of 1 million tonnes of renewable hydrogen).
  • Manufacturing of electrolysers (of up to 100 MW) would need to be scaled up.
  • Consumption would be mostly on-site in a first instance and would serve industrial processes, such as steel and chemicals, and hydrogen refuelling stations for buses.
  • In the short and medium term, the need for low-carbon hydrogen is also acknowledged, which will require the deployment of CCUS infrastructure.
  • Blending option with natural gas could be considered for distribution at a later stage.

Phase 2 (2025-2030): 

  • The target is 40 GW of renewable hydrogen electrolysers by 2030 (i.e. production of 10 million tonnes of renewable hydrogen).
  • Hydrogen would decarbonise steelmaking, trucks, rail and some maritime transport applications and other transport modes. It would also serve for balancing: daily and seasonal storage, backup and buffering.
  • The backbone of a European infrastructure will need to be designed to transport and distribute hydrogen, including a network for H2 refuelling stations and for heating in residential and commercial buildings (notably in H2 valleys).
  • International trade in hydrogen would expand, especially with Eastern and Southern neighbouring partner countries.
  • The EU would aim at completing an open and competitive EU hydrogen market, with unhindered cross-border trade and efficient allocation of hydrogen supply among sectors.
  • Overall, 2x40 GW by 2030 is the guiding vision

Phase 3 (2030-2050): 

  • Renewable hydrogen technologies should reach maturity and be deployed at large scale to reach all hard-to-decarbonise sectors where other alternatives might not be feasible or have higher costs.
  • A potential ¼ of the EU’s renewable electricity production will be used for hydrogen production, which in turn would account for up to more than 23% in the 2050 energy mix.
  • Hydrogen and hydrogen-derived synthetic fuels would further penetrate all hard-to-abate sectors such as maritime transport, aviation, and the heating system for buildings.

The Strategy outlines investment needs for the hydrogen sector, including renewables production and distribution. By 2030, electrolysers will require €24-42 billion, renewable energy generation will need €220-340 billion, CCS technology will cost €11 billion, and hydrogen distribution networks will require €65 billion, totalling at least €320 billion.

By 2050, cumulative investment needs in renewable hydrogen production would be up to €180-470 billion and between €3-18 billion for low-carbon fossil-based hydrogen. Besides, analysts estimate that clean hydrogen could meet 24% of energy world demand by 2050, with annual sales in the range of €630 billion.

Regarding policy, the Communication includes a range of key measures:

  • Introducing a common low-carbon threshold/standard for the promotion of hydrogen production installations based on their full life-cycle greenhouse gas performance (possibly defined relative to the existing ETS benchmark).
  • Introducing a comprehensive terminology and European-wide criteria for the certification of renewable and low-carbon hydrogen.
  • Making hydrogen infrastructure an important part of TYNDP planning, draw synergies between TEN-E, TEN-T and AFID, and ensure infrastructure access is non-discriminatory.
  • Considering hydrogen blending within natural gas networks.
  • Moving towards a liquid market with commodity-based H2 trading, with visible price signals and establishment of clear rules on third party access, electrolyser connection to the grid and permitting.
  • Considering the possibility to introduce minimum shares or quotas of renewable hydrogen or its derivatives in specific end-use sectors.

In addition to creating a regulatory framework, funding will be available. Firstly, the European Clean Hydrogen Alliance (ECH2A) has developed a pipeline of investment projects, providing a forum for coordinating investment and facilitating cooperation on large projects, including four IPCEI projects. It will be supported by InvestEU's Strategic Investment Facility and the ETS Innovation Fund. The EU’s recovery plan, Next Generation EU, offers funding opportunities through InvestEU, the Recovery and Resilience Facility, increased Cohesion funding via REACT-EU, and the Just Transition Mechanism. Additionally, it will develop a Carbon Contracts for Difference (CCfD) pilot programme and enhance market-based support schemes.

Finally, on the international dimension, the European Commission wants to strengthen EU leadership in international fora and develop the hydrogen mission within the mandate of Mission Innovation (MI2). It will set out closer cooperation with Southern and Eastern neighbouring countries (including Ukraine) and with the African Union. On top of that, it strives to establish the euro as the benchmark currency for hydrogen trade.

The Fit for 55 and Hydrogen and Decarbonised Gas Market packages aim to implement the strategy into law, ensuring targets are achievable and an internal market for hydrogen is developed by 2030.

Due to the war in Ukraine and the EU's goal to reduce Russian fossil fuel imports, the European Commission introduced the REPowerEU plan in May 2022. This plan supports the EU hydrogen strategy and aims to boost renewable hydrogen production and import 10 million tonnes by 2030 through the 'hydrogen accelerator' initiative.

What’s in it for hydrogen?

The EU’s Hydrogen Strategy gives a central role to hydrogen in its planned integrated energy system. Not only seen as a cornerstone of the energy mix, which would help decarbonise hard-to-abate industries or transport means, the European Commission considers hydrogen a ‘key technology’ to link sectors with each other, thereby enabling the energy system integration it set forth.

The Strategy’s main priority is to fix targets for hydrogen deployment based on a 3-phase roadmap and to detail policy and support measures. It intends to define a first terminology, and a certification system of hydrogen types based on life cycle emissions. On top of that, the introduction of renewable hydrogen quotas for certain end-use sectors would overall be beneficial to the whole hydrogen industry and would boost business development opportunities of the hydrogen value chain players.

Regarding production, the Strategy gives clear targets: 6 GW of electrolysers capacity for a production of 1 million tonnes of renewable hydrogen by 2024 and 40 GW of electrolysers capacity for a production of 10 million tonnes of renewable hydrogen by 2030. The Clean Hydrogen Alliance has identified and supported flagship production projects. Scaled up manufacturing of larger electrolysers (up to 100 MW) will also be fostered, including via the European Green Deal call. Although the priority is renewable hydrogen production, low-carbon hydrogen is considered useful at least in a transitional phase.

Links to Legislation and additional information:
Hydrogen Strategy – European Commission Communication COM(2020) 301 final