Debottlenecking Electrolyzer Availability: The Path to a Green Hydrogen Economy
2022 was just three years ago, yet it feels like a completely different world in the hydrogen universe. In the face of the Russian invasion of Ukraine, the EU published its RePowerEU program to end its dependence on energy imports from Russia. As part of this program, the EU significantly increased its green hydrogen ambitions, setting new targets of ten million tons of EU-domestic green hydrogen production and an additional ten million tons of green hydrogen imports. Even at the time, it was an ambitious goal, but the moment called for bold action. After all, in 2022, the technology was ready and green hydrogen was one of the few viable options to significantly reduce the EU’s dependency on energy imports. Back in 2022, the EU’s RePowerEU program set a bold vision to reduce dependence on energy imports from Russia and drive the hydrogen economy forward.
Producing ten million tons of green hydrogen annually requires roughly 100 GW of installed electrolyzer capacity, yet in 2022, only a few dozen megawatts of water electrolyzer capacity were installed. Europe was the leading region for electrolyzer manufacturing globally; however, the overall manufacturing capacity for water electrolyzers was just around 2.5 GW per year. This was clearly insufficient to meet the 200 GW required for both domestic production and hydrogen imports. At this rate, the 2030 goals would surely have been missed. With this in mind, there were many doubts regarding electrolyzer availability, and project developers and politicians were concerned about a potential shortage. After all, nobody wanted to miss the 2030 targets, delay decarbonization efforts, or prolong dependency on energy imports (especially from Russia) due to a lack of equipment.
Recognizing this bottleneck, the EU commission rallied thyssenkrupp nucera and the broader electrolyzer manufacturing sector together. The commitment made during the European Electrolyzer Summit in 2022 to reach 25 GW per year of manufacturing capacity by 2025 was a testament to the belief in a shared vision for green hydrogen’s potential. This pledge reflected trust not just in technology and the industry’s ability to deliver, but also in the alignment of market demand, societal support and political will.
And the electrolyzer industrie delivered. By late 2024, European electrolyzer manufacturing capacity had grown to 10.4 GW per year—a fourfold increase in just two years. , showcasing the industry’s capability to meet all anticipated demand. This rapid expansion has ensured that electrolyzer availability is no longer viewed as a constraint for scaling the hydrogen economy, availability of electrolyzers is debottlenecked.
However, this achievement did come at a cost. While electrolyzer manufacturers successfully ramped up capacity, actual demand has fallen significantly short of expectations. Despite Europe having the capability to produce over 10 GW of electrolyzers annually, the current demand within the continent is under 1 GW per year. The imbalance is massive—manufacturing capacity has outpaced demand by almost an order of magnitude, leaving a significant portion of the industry underutilized. This situation is unsustainable for manufacturers, as facilities can’t operate efficiently at reduced capacity. Some manufacturers have even been forced to pause production.
This demand shortfall is tied to the slow progress of hydrogen projects. Fewer projects than expected have reached final investment decisions, a critical step toward creating firm offtake for electrolyzers. Meanwhile, policy frameworks, though supportive in intent, have not led to sufficient green hydrogen production incentives. While initiatives such as the EU Innovation Fund are steps in the right direction, the larger objective of driving substantial hydrogen demand has yet to be realized.
thyssenkrupp nucera has maintained its leadership in the industry, with 3 GW of electrolyzer projects under execution globally, but the broader manufacturing sector faces overcapacity challenges. This overall market situation prevents fulfilling the 25 GW annual capacity target by 2025. Simply put, without adequate demand, further expansion would only exacerbate the current bottleneck on the demand side.
Despite these hurdles, the 2030 goals of producing and importing 10 million tons of green hydrogen annually are still within reach. Success will not come easily—it demands immediate and decisive action. Clear and unwavering support from the EU Commission and member states is paramount. Implementation of the Renewable Energy Directive III at national level and strict enforcement of green molecule quotas are essential. Simultaneously, pragmatic funding mechanisms for green hydrogen projects must be prioritized.
Equally important is regulatory certainty. Any ambiguity or anticipated changes to regulations can deter project developers from moving forward, causing delays that the hydrogen economy can ill afford. Therefore, existing regulations should be streamlined to foster hydrogen projects instead of hampering them. Necessary adjustments must be made quickly and decisively to prevent prolonged periods of uncertainty.
Achieving the EU’s 2030 green hydrogen targets is ambitious, but it’s worth aiming high. Even falling slightly short would signify remarkable progress. However, what’s most important is that efforts begin in earnest. Today, it often feels like we’re hesitating rather than taking decisive steps forward.
The example set by electrolyzer manufacturers proves that rapid progress is possible when the industry and policymakers align behind a clear, shared objective. Now is the time to address the remaining bottlenecks in the hydrogen ecosystem, stimulate demand, and create the conditions necessary for projects to flourish. Together, with a focused and collaborative effort, the hydrogen economy can deliver on its promise of a sustainable future.
