According to the International Energy Agency’s (IEA) Northwest European Hydrogen Monitor 2025 report, Northwest Europe is emerging as a leader in low-emissions hydrogen development.
This region accounts for approximately 40 per cent of Europe’s total hydrogen demand, benefiting from vast renewable energy resources and significant carbon storage potential in the North Sea.
Furthermore, a well-established, interconnected gas network could be partially repurposed to transport and distribute low-emissions hydrogen from production sites to demand centres.
The report outlines ambitious plans for the short- to medium-term, with Northwest European countries aiming to develop between 30 and 35 gigawatts (GW) of electrolyser capacity by 2030.
However, most low-emissions hydrogen initiatives are still in the early stages, and their success will heavily depend on supportive policies and regulatory frameworks. A regional approach is also essential to optimise synergies among national markets.
The report highlights the critical role of low-emissions hydrogen in decarbonising energy systems and meeting climate targets.
Despite its potential, the low-emissions hydrogen sector faces challenges, including limited demand creation, high production costs, and logistical complexities.
As of now, the hydrogen demand in Northwest Europe is around three million tonnes per year, primarily sourced from unabated natural gas, with significant use in the refining and chemicals sectors.
To stimulate investment, creating demand for low-emissions hydrogen through quotas, fuel standards, and public procurement rules is essential.
The revised Renewable Energy Directive (RED III), effective from November 2023, sets binding targets for renewable hydrogen in industry and transport, although implementation is lagging in some member states.
Northwest European countries have shown commitment to developing hydrogen derivatives for the maritime sector, driven by new international regulations.
The report projects that regional low-emissions hydrogen production could reach nearly eight million tonnes by 2030 if current projects become operational.
However, less than 8 per cent of the projects are in advanced stages of development. The report also notes that Northwest Europe is home to 85 per cent of Europe’s electrolyser manufacturing capacity, yet manufacturers face challenges due to project delays and lower-than-expected orders.
In terms of cost, renewable hydrogen prices remain significantly higher than those from unabated natural gas, highlighting the need for cost reductions to improve competitiveness.
The report suggests that a carbon price of US$140 per tonne of CO2-equivalent could level the playing field by the end of the decade.
To support the emerging low-emissions hydrogen sector, a comprehensive approach encompassing research, development, production, and demand creation is necessary.
The report also emphasises the potential for Northwest Europe to play a key role in international low-emissions hydrogen trade, with significant export-oriented projects identified for the near future.
Investment in hydrogen infrastructure for transport and storage is crucial to meet ambitious deployment targets.
The hydrogen network in Northwest Europe could reach nearly 13,000 kilometres by the early 2030s, but firm investments are still lacking. Immediate action is required from all stakeholders to ensure the targets set for 2030 are achieved.
The countries analysed were Austria, Belgium, Denmark, France, Germany, Luxembourg, the Netherlands, Norway, Switzerland, and the United Kingdom.
