Jorgo Chatzimarkakis, the CEO of Hydrogen Europe, has thrown down the gauntlet, emphasizing that Europe must sharpen its competitive edge in electrolyser technology to retain its leadership in the global hydrogen landscape. Water electrolysis stands as the backbone of a clean hydrogen economy, and as the sector accelerates, we’re witnessing an explosion of electrolyser technology developers across Europe and beyond. However, the challenge is real. With the total installed water electrolyser capacity hitting 1.4 GW at the end of 2023—nearly double that of the previous year—Europe is still playing catch-up. The International Energy Agency (IEA) predicts this could soar to 5 GW by the end of 2024, yet the sobering reality is that China accounted for a staggering 80% of new capacity in 2023, while Europe trailed with a mere 12%.
This gap is alarming, especially considering Europe’s historical prowess in hydrogen technology research and development. The specter of losing out, akin to the fate of the solar photovoltaic sector two decades ago, looms large. If we don’t act decisively, we risk allowing our hard-earned advancements to slip through our fingers once again. The situation is compounded by the stark reality that Europe’s manufacturing costs for alkaline electrolysers have surged by 50% since 2022, with prices exceeding $2,000 per kilowatt in Europe and the U.S., while Chinese counterparts flaunt prices as low as $480-$720 per kilowatt. The cheaper labor, favorable supply chains, and generous subsidies in China create an uneven playing field that European companies struggle to navigate.
So, how can Europe fend off this growing competition? The European Union (EU) must take the bull by the horns, enforcing trade principles to deter unfair practices. The upcoming European Commission, under President von der Leyen, seems poised to tackle these challenges head-on, with the Green Deal Industrial Plan (GDIP) aiming to bolster the competitiveness of Europe’s net-zero industry. This plan isn’t just a bunch of bureaucratic fluff; it’s a robust strategy to simplify regulations, enhance state aid, and build a resilient supply chain for clean technologies.
The Net Zero Industry Act (NZIA) and the Critical Raw Materials Act (CRMA) are pivotal components of this strategy. The NZIA aims for at least 40% of the EU’s annual clean technology deployment needs to be met domestically by 2030, while the CRMA focuses on securing essential materials to build out that capacity. If executed properly, these initiatives could breathe new life into the hydrogen economy and the broader clean tech sector.
But let’s not kid ourselves; the responsibility doesn’t lie solely with policymakers. European technology developers must step up their game, driving innovation to stay ahead. This includes enhancing the safety profiles of European electrolysers and improving performance while working on material efficiency and recycling to bolster supply chain resilience. The diversification of hydrogen production pathways—think waste-to-hydrogen and pyrolysis—will also be crucial for increasing hydrogen supply while hitting decarbonization targets.
As the energy transition unfolds, resilience must be the name of the game. The upcoming European Hydrogen Bank auction has already set a precedent, stipulating that no more than 25% of components for electrolyser stacks can be sourced from China. This move not only protects local production but also fortifies the European market against external shocks.
In the end, the future of hydrogen technology in Europe hinges on a multifaceted approach—regulatory support, innovative breakthroughs, and a commitment to maintaining a competitive edge. The stakes are high, and the clock is ticking. Europe has the talent and the knowledge; now it needs the will to harness them effectively. The hydrogen race is on, and Europe can’t afford to be left in the dust.
