On September 13, 2023, Ursula von der Leyen, President of the European Commission, stated during her State of the Union address that the European Union (EU) is attracting more investments in clean hydrogen than the US and China combined. This statement aligns with the context of the European Green Deal and the ambitious goal of establishing the EU as a leading player in clean energy, particularly in hydrogen technologies.
According to the Hydrogen Council 2023, announced investments in Europe amount to over $190 billion, the highest globally. This corroborates von der Leyen’s statement. However, it is crucial to note that these figures refer to announced investments, not actualized projects. The Global Hydrogen Review 2023 by the International Energy Agency (IEA) indicates that actual investments and progress (measured by Final Investment Decisions, FIDs) have taken a different trajectory.
To analyze von der Leyen’s claim, it is essential to understand that not all announced investments in hydrogen technologies are necessarily directed toward clean hydrogen. To grasp this better, it is important to define what “clean hydrogen” entails. Essentially, clean hydrogen refers to hydrogen produced with little to no greenhouse gas emissions. There are three main types of clean hydrogen:
Investments in the Hydrogen Sector – A Global Overview
The hydrogen industry announced global investments totaling $570 billion in 2023, with plans to implement these by 2030. The goal is to establish hydrogen as a key component of the global energy transition. Europe, with over $190 billion in announced investments, leads significantly in the project pipeline. In comparison, the US plans $68 billion, while China has announced $35 billion, according to the Hydrogen Insights report. Together, the US and China total $103 billion, underscoring that Europe aims to invest more in clean hydrogen than both countries combined.
However, only 7% of globally announced clean hydrogen investments have reached the Final Investment Decision (FID) stage, according to the report. FIDs represent companies’ definitive commitment to invest in and execute a project. In the hydrogen industry, an FID signals a project moving from planning to realization, following comprehensive feasibility studies. FIDs are a key indicator of progress and the tangible implementation of hydrogen projects.
In Europe, FIDs account for only 4% (equivalent to $8 billion), while North America has achieved 15% ($10 billion), and China leads with 35% ($12 billion) of investment decisions progressing to implementation.
Comparing Investments and Technologies in Clean Hydrogen
In clean hydrogen, Europe, China, and the US prioritize investments and technology in different ways.
- Europe
According to its published Hydrogen Strategy Plan, the EU prioritizes the development of hydrogen produced primarily with wind and solar energy. Renewable hydrogen is seen as the best long-term option to align with the EU’s climate neutrality and zero-pollution goals. Initiatives such as the Important Projects of Common European Interest (IPCEI) and the Clean Hydrogen Alliance have supported hydrogen production in the EU. An example is Sweden’s H2 Green Steel project, one of the EU’s largest, with an investment of approximately $7 billion. - China
China also promotes its hydrogen sector, focusing primarily on industrial strengthening. Decarbonization and energy security are secondary goals. According to Hydrogen Insights, China concentrates on producing blue hydrogen derived from fossil fuels with carbon capture and storage (CCS). This approach reduces CO₂ emissions while leveraging existing fossil fuel infrastructure. Sustainability is not China’s primary focus, as its strategy includes hydrogen production from coal, according to the Research Institute for Sustainability. This allows China to reduce CO₂ emissions without abandoning its reliance on fossil fuels. - United States
The US focuses on producing hydrogen from both renewable energy sources (green hydrogen) and fossil fuels with CCS (blue hydrogen). Blue hydrogen is viewed as a transitional solution to scale the hydrogen economy while reducing CO₂ emissions. CCS plays a pivotal role in the US hydrogen strategy, designating blue hydrogen as “clean” since CO₂ emissions during production are captured and stored. Initiatives like the Inflation Reduction Act (IRA) and the Hydrogen Production Tax Credit provide fiscal incentives for clean hydrogen projects.
Conclusion
The EU is clearly focused on green hydrogen, emphasizing genuinely clean production, while China and the US also include blue hydrogen (with carbon capture) in their definition of “clean” hydrogen. Nevertheless, green hydrogen remains the long-term priority for all three regions as the most sustainable solution for decarbonization.
Ursula von der Leyen’s claim that Europe attracts more investments in clean hydrogen than China and the US combined is mostly true. While Europe leads in announced investments with $190 billion compared to the combined $103 billions of China and the US, both countries are ahead in the actual implementation of projects. Europe leads in the production of green, emission-free hydrogen.
RESEARCH | ARTICLE | Lili Lubkowitz, Hochschule der Medien Stuttgart, Germany
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