EU closes first hydrogen matching round with strong demand

The European Commission has closed the first round of its Hydrogen Mechanism with a large majority of renewable and low-carbon hydrogen suppliers receiving interest from potential buyers, it said in a statement on April 29.

The mechanism, operated under the EU Energy and Raw Materials Platform, attracted expressions of interest for 87% of the 265 registered supply opportunities.

Half of the suppliers garnered interest from at least three potential buyers, demonstrating robust demand for clean hydrogen and its derivatives. Production projects from 33 countries, including 16 EU countries, are registered to supply, with demand projects from 10 countries.

"Market participants currently developing hydrogen projects on both supply and demand side responded with high engagement, showing great appetite for this new initiative and the development of the hydrogen market," the commission said.

Ammonia leads derivatives

Renewable and low-carbon ammonia-led derivative projects with 47 registrations, followed by 37 methanol projects, 18 e-methane projects, and 14 e-SAF projects, according to the commission. The platform registered 45 offtake projects, with buyers from 10 EU countries -- Belgium, the Czech Republic, Finland, France, Germany, Hungary, Italy, Netherlands, Poland, and Spain -- requesting deliveries.

The mechanism provided suppliers a transparent route to test demand for specific projects and identify potential offtakers without the administrative burden of running individual processes, the commission said. About 54% of supply opportunities included price indications, offering market intelligence to support procurement decisions.

Platts, part of S&P Global Energy, assessed the cost of EU-compliant green hydrogen production via alkaline electrolysis in Germany, backed by renewable power purchase agreements, at Eur7.52/kg ($8.78/kg) on April 29.

Participants will now engage directly outside the mechanism to explore future collaborations, the EC said.

The commission said it is reflecting on next steps for the Hydrogen Mechanism, including how to support infrastructure development, building on the encouraging results from the first round. The platform addresses major barriers to hydrogen market development, including demand and supply uncertainty, a lack of infrastructure, and funding challenges, the commission said.