EC, electrolyzer manufacturers target tenfold increase in European production capacity

The European Commission has signed a joint declaration with major European electrolyzer manufacturers on a range of initiatives to boost output of the hydrogen-producing technology, targeting a tenfold increase in manufacturing capacity by 2025.

The EC said this would facilitate its target of 10 million mt/year of green hydrogen production in the EU by 2030.

The joint declaration, signed at an industry event in Brussels on May 5, sets out a target of 17.5 GW/year of electrolyzer manufacturing capacity, 10 times the current capacity.

"Clean hydrogen is indispensable to reduce industrial carbon emissions and contribute to our energy independence from Russia," European Commissioner for Internal Market Thierry Breton said in a statement. "Today, industry agreed to a tenfold increase in electrolyzer manufacturing capacities in Europe. The Commission will support this important industrial upscaling for an industrial leadership in the clean energy technologies of the future."

Industry body Hydrogen Europe said achieving the 10 million mt/year goal would require a ramp up of electrolyzer production to around 25 GW/year, for an installed electrolyzer capacity of 90-100 GW.

The task was "an unprecedented challenge and a significant industrial opportunity," it said in a statement.

The Commission also pledged to put in place a supportive regulatory framework, facilitate access to finance and promote efficient supply chains, it said.

The measures include proposed legislation on accelerated permitting for renewable energy projects, collaboration with the European Investment Bank on electrolyzer financing, and a commitment to integrate the value chain, and diversify raw material supply.

The declaration committed putting in place carbon contracts for difference to further incentivize large-scale deployment of clean hydrogen technologies, Hydrogen Europe said.

The EC also said it would back the hydrogen targets included in the Renewable Energy Directive and the Alternative Fuels Infrastructure Regulation Proposal.

"The ball is in the legislators' court to uphold ambitious targets in the Fit for 55 package and conclude the work on the Delegated Act on RFNBOs with clear and feasible rules," Hydrogen Europe CEO Jorgo Chatzimarkakis said in the statement. "Now is the time to remove all obstacles to build a home for electrolyzers in Europe."

"The electrolyzer manufacturing capacity must be scaled up significantly to meet the expected European demand for renewable hydrogen," CEO of Norwegian electrolyzer manufacturer Nel Hydrogen Jon Andre Lokke said in a statement. "There is no acceleration in electrolyzer manufacturing in Europe without adequate regulatory and financial support. Cost effective and scalable solutions are key qualification criteria."

Nel has a production capacity of 500 MW/year at its Heroya plant in Norway, with plans to scale to 2 GW. The company is also targeting 10 GW/year of production capacity globally by 2025, and aims to start an additional site selection process in Europe.

S&P Global Commodity Insights assessed the cost of producing renewable hydrogen via alkaline electrolysis in Europe at Eur11.92/kg ($12.53/kg) May 4 (Netherlands, including capex), based on month-ahead power prices, almost double to cost of blue hydrogen production by steam methane reforming (including carbon, CCS and capex), assessed at Eur6.64/kg.