5nd sequel
VI. Implementation and Industry Challenges
Whereas all EU member states recognise hydrogen’s strategic importance, national approaches vary considerably: For instance, Germany prioritises industrial demand and largescale domestic electrolyser capacity, whereas Spain emphasises renewable-based hydrogen production leveraging abundant solar resources and France focuses on low-carbon hydrogen linked to nuclear power. These differences reflect national energy systems and industrial structures, however, they complicate EU-wide policy harmonisation.
On 23 June 2025, in a joint industry appeal, over 15 private companies urged the European Commission to revise its draft Delegated Regulation on low-carbon fuels, specifically the GHG (greenhouse gas) methodology for low-carbon hydrogen and derivative fuels. This
regulation is part of the implementing rules linked to EU climate and energy law that define how emissions are calculated for these fuels, which affects certification, incentives and market deployment.
On 8 July 2025, the European Commission finally published the delegated act on low-carbon hydrogen, ahead of the 5 August 2025 deadline set by the Gas and Hydrogen Markets Directive, titled “Commission Delegated Regulation (EU) 2025/2359 of 8 July 2025 supplementing Directive (EU) 2024/1788 of the European Parliament and of the Council”, by specifying a methodology for assessing greenhouse gas emissions savings from lowcarbon fuels”.34 The act laid down the methodology for calculating greenhouse gas emissions across different hydrogen production pathways.35 Its provisions carry major consequences for investment in low-carbon hydrogen technology, the cost of producing hydrogen in the EU, and the climate integrity of the EU’s hydrogen economy.36 The Regulation entered into force on 11 December 2025.
Within this framework, exciting PPI initiatives have come to mark a significant step in the decarbonisation process, signalling a strong industry pivot towards zero-emission technologies. These include the recent initiative of HDF Energy, of France and ABB’s Marine & Ports division, who are said to be partnering to develop a multi-megawatt hydrogen fuel cell system. The project is tied to broader industrial objectives supported by the French Government and the EU’s Important Projects of Common European Interest (IPCEI) Hydrogen programme, with HDF Energy having secured significant funding under the France 2030 plan. This backing is likely to accelerate the commercial rollout and strengthens Europe’s role in cutting-edge hydrogen technologies.37 Under the said joint venture, HDF Energy, a company specialising in hydrogen infrastructure and fuel cell systems, will lead the design, certification, manufacturing, testing, and commercialisation of the high-power fuel cell units. ABB, a global leader in automation and electrification, will be responsible for system integration and ensuring compatibility with ship electrical systems, as well as leveraging its extensive global network to assist in marketing and deployment of the technology.38 Whereas Maritime transport is responsible for around 3 % of global greenhouse gas emissions, this collaboration directly addresses that environmental challenge by targeting both propulsion and auxiliary power applications on a broad range of vessel types. This underscores the strategic importance of hydrogen fuel cells in enabling Vessel Owners and Operators to meet the stringent emissions regulations imposed by bodies such as the International Maritime Organization (IMO), while also reducing port-side air
pollution.39 In addition, cross-border infrastructure initiatives such as the H2Med pipeline further illustrate the potential for regional cooperation and the emergence of integrated hydrogen corridors.
However, whereas some companies embrace hydrogen’s role in the energy transition, others highlight the cost pressures, infrastructure gaps, and regulatory rigidity that may slow practical deployment, revealing that policy ambition must continually adapt to economic
realities.41 Market actors occasionally express scepticism about hydrogen’s near-term viability.
For instance, Airbus suspended its hydrogen-powered ZEROe aircraft programme due to technological and development delays, underscoring that some hydrogen innovation projects are encountering real-world viability and timeline challenges.42 Moreover, the abrupt
withdrawal of Stellantis from hydrogen fuel cell development has raised concerns about the economic sustainability of certain hydrogen applications without stronger market demand or regulatory support.43 Disagreements over the classification of nuclear-based hydrogen have
proven particularly contentious.44 Delays in adopting EU-wide rules on low-carbon hydrogen have generated regulatory uncertainty, undermining investor confidence and slowing project development.
The aforementioned examples highlight that a balanced approach which maintains environmental ambition while enhancing market certainty and cost-competitiveness will be critical to realise hydrogen’s potential within the EU’s broader decarbonisation strategy.
Conclusion
The European Union’s vision for the future of the gas system is clearly articulated through a combination of strategic policy initiatives—most notably the EU Hydrogen Strategy and REPowerEU—and a rapidly evolving legislative framework, including the TEN-E Regulation and the Gas and Hydrogen Markets Directive and Regulation. Collectively, these instruments outline a fundamental restructuring of Europe’s gaseous energy infrastructure.
The emerging model is based on a gradual bifurcation into two distinct but interrelated systems: one centred on renewable and low-carbon gases, such as biomethane and synthetic methane, progressively displacing unabated fossil gas; and another dedicated to the transport
and use of pure hydrogen. While limited hydrogen blending may serve as a transitional measure in certain contexts, EU policy increasingly favours the development of hydrogenspecific infrastructure to ensure system efficiency, safety, and long-term scalability.
The practical implementation of this vision will necessarily differ across Member States, reflecting variations in existing infrastructure, industrial demand, geographic conditions, and energy mixes. In some countries, large sections of the current natural gas network are
expected to remain operational, albeit with declining volumes of fossil methane and increasing shares of renewable gases. In others, particularly those with favourable conditions for hydrogen production or strong industrial demand, parts of the existing gas grid may be
repurposed for hydrogen transport or CO₂ infrastructure, while less viable assets may ultimately be decommissioned. This differentiated approach underscores the EU’s attempt to balance system-wide coherence with national flexibility, while steering all Member States
towards a common long-term decarbonisation trajectory.
This structural transformation is unfolding within a broader geopolitical and economic landscape that has become markedly more complex in recent years. Energy resources, transport networks, market organisation, and competition are deeply interwoven with geopolitical developments and national strategic interests. The Russian invasion of Ukraine has acted as a critical catalyst, exposing vulnerabilities in Europe’s energy system and accelerating the push for diversification, resilience, and reduced dependence on imported fossil fuels. In this context, hydrogen has assumed a dual role: as a climate mitigation tool and as an instrument of energy security. The urgency of these objectives has significantly strengthened EU-level governance, progressively narrowing the scope for independent national energy policy choices and reinforcing the centrality of coordinated European action.
As a result, EU energy policy is increasingly characterised by a top-down logic in which common climate goals, internal market considerations, and security concerns take precedence over purely national preferences. While Member States retain discretion over implementation pathways, the strategic direction is increasingly shaped at the EU level. Hydrogen policy exemplifies this shift, as national strategies are explicitly aligned with EU frameworks, funding instruments, and regulatory standards. This growing convergence reflects a political consensus that fragmented approaches would undermine both the efficiency and credibility of the energy transition.
At the same time, the analysis highlights a persistent tension between regulatory ambition and economic reality. Although EU hydrogen policy has succeeded in mobilising political attention and early-stage investment, it has not yet resolved fundamental challenges related to
cost competitiveness, demand certainty, and infrastructure synchronisation. The delayed adoption and contested design of the delegated act on low-carbon hydrogen demonstrate the 12 difficulty of reconciling environmental integrity with industrial feasibility. Regulatory uncertainty – particularly regarding emissions accounting methodologies and the classification of hydrogen production pathways – has at times slowed investment decisions and exposed divisions among Member States and market actors.
Private sector responses further illustrate these challenges. While some companies continue to support hydrogen’s long-term role in the energy transition, high costs, technological constraints, and unclear market signals have led others to scale back or abandon hydrogenrelated projects. These developments do not negate hydrogen’s strategic relevance, but they underline the risks of overestimating its short-term deployment potential and the need for more realistic sequencing of policy objectives. At the same time, cross-border infrastructure initiatives demonstrate the added value of regional cooperation and the potential for economies of scale if policy coordination is matched by timely implementation.
Ultimately, the success of EU hydrogen policy will depend on its capacity to evolve pragmatically while maintaining climate ambition. This requires regulatory frameworks that are robust yet flexible, capable of adapting to technological progress and market feedback without undermining investor confidence. Clearer long-term demand signals, improved coordination between infrastructure planning and industrial policy, and continued alignment between national and EU-level objectives will be essential.
In a nutshell, if the EU can successfully bridge the gap between regulatory vision and commercial viability, hydrogen may become a genuine pillar of Europe’s climateneutral energy and industrial system. If not, it risks remaining a strategically important concept that delivers more in policy narratives than in real-world decarbonisation outcomes.
