French green hydrogen company Lhyfe refocuses strategy on mature markets

French renewable hydrogen producer Lhyfe will cut costs by 30% from 2026 and refocus its development strategy on mature European markets as the EU's hydrogen sector develops more slowly than anticipated, the company said in a statement on Dec. 19.

The green hydrogen producer has a total of 22 MW of capacity installed across France and Germany, and plans to increase that by 70% in 2026, though it has warned that the slower-than-expected market development means it will prioritize markets that have the required regulatory frameworks.

"While the market's development is clear, it remains selective and slower paced, calling for appropriate management and alignment of the company's resources, as well as the prioritization of investments in order to accelerate the path to breakeven and drive profitability," Lhyfe said in the statement.

Lhyfe pointed to just 600 MW of operational green hydrogen capacity in Europe, against a previous EU target of 40 GW by 2030, set in 2020.

The company noted the EU regulatory framework for hydrogen had been established, but said slow transposition of the revised Renewable Energy Directive by member states was hampering market development.

"The European political and regulatory context in which Lhyfe is operating is [still] holding back the development of the market, whereas in other regions where the ambitions and associated regulatory frameworks have been set, the market is developing very quickly," it said.

Only five of 27 EU countries have transposed RED III into national law, and only two of these have done so fully.

It is targeting sales of Eur10 million ($11.7 million) for the full year 2025, double the Eur5 million in sales for 2024, and up from Eur1 million the year before.

Platts, part of S&P Global Energy, assessed the cost of EU-compliant green hydrogen production via alkaline electrolysis in France, backed by renewable power purchase agreements, at Eur7.75/kg ($9.07/kg) on Dec. 18.

Company strategy

The company has pursued a selective approach in the early green hydrogen market in Europe, developing production sites where there is a clear demand for the end product, and designing and installing facilities to meet these needs.

The company identified its priority sectors as mobility, European refineries and UK industry.

It has been shortlisted for two projects under the UK's second electrolytic hydrogen allocation round, with results expected in the first quarter of 2026.

"The other projects remain in the portfolio in order to pursue future market developments," Lhyfe said.

Lhyfe has installed six production sites, with plans to expand to eight in the near future, it said.

It also has a 70-strong container fleet, 20 storage sites and partners with three transport companies for hydrogen deliveries, supplying over 60 customers across nine European countries, it said.

The company said it would adopt a "leaner" approach to project development from 2026, refocusing engineering on core expertise and outsourcing engineering, procurement and construction for future projects, given the maturity now reached by industry suppliers and the project management experience acquired by Lhyfe."

Lhyfe has secured EU Renewable Fuel of Non-Biological Origin across four of its operational facilities.

Its facilities in Buleon and Bessieres in France and Schwabisch Gmund in Germany received RFNBO certification under the EU's Renewable Energy Directive in September, following earlier certification of its French Bouin site in May.

The 10-MW Schwabisch Gmund site, inaugurated in October, is Lhyfe's largest to date and the second-largest operational renewable hydrogen plant in Germany.

Select Lhyfe RFNBO-certified operational sites

Source: Lhyfe