Europe's Bold Move: Refiners Bet Big on Green Hydrogen
London, Friday, 26 September 2025.
European refiners are diving into green hydrogen to meet decarbonisation goals, spurred by EU policies. This shift is crucial as refineries contribute 98% of global hydrogen demand.
Europe’s Green Hydrogen Surge
European refiners are diving into green hydrogen to meet decarbonisation goals, spurred by EU policies. This shift is crucial as refineries contribute 98% of global hydrogen demand [1]. The European Union’s Renewable Energy Directive III (RED III) mandates support for ‘renewable fuels of non-biological origin’ (RFNBOs), including green hydrogen. This policy framework is vital for the transport sector and fuel-cell vehicles [1].
Investments and Challenges
Refiners have already committed over $5 billion to develop 6 million tonnes per annum (Mtpa) of low-carbon hydrogen capacity. However, the high cost of clean power remains a significant hurdle [1]. Fortunately, forecasts predict a drop in the levelised cost of renewable electricity in Europe by the decade’s end, offering hope for cost reduction [1].
Global Involvement
China and India are significant players in the green hydrogen scene. China is vigorously expanding its value chain, although green credentials can sometimes be incomplete [1]. Meanwhile, India aims to produce 5 Mtpa of hydrogen by 2030, with over half earmarked for exports, including to Europe [1].
Technological Advancements
Electrolyzer technology has seen remarkable advances, with costs dropping nearly 30% since 2020. Companies like Electric Hydrogen are leading the charge, aiming for an additional 15% cost reduction [6]. These advancements are crucial for making green hydrogen as affordable as natural gas, a goal that could revolutionise the energy landscape [6].
Policy and Future Prospects
The International Maritime Organization’s net-zero framework, expected to come into force by 2027, could unlock substantial demand for hydrogen-derived fuels, potentially capturing 15% of the current marine fuel market [1][alert! ‘framework adoption status not confirmed’]. This underscores the importance of swift policy adoption and robust incentives to propel the green hydrogen revolution forward [6].