The Heralds of Hydrogen: The Economic Sectors that are Driving the Hydrogen Economy in Europe

This paper looked at 39 hydrogen associations across Europe to understand which economic sectors support the hydrogen transition in Europe, and why they do so. Several broad conclusions can be drawn from this paper. It is clear that the support for hydrogen is broad and from a very wide spectrum of economic actors that have clear interests in the success of the hydrogen transition. Motivations for support differ. Sales and market growth are important for companies pursuing professional, scientific, and technical activities, as well as manufacturers of chemicals, machinery, electronic or electrical equipment, and fabricated metals. The increasing cost of CO2 combines with regulatory and societal pressure to decarbonize, and concerns from investors about the long-term profitability of sectors with high emissions. This makes hydrogen especially interesting for companies working in the energy, transport, steel, and chemical industries. Another motivation is the ability to keep using existing fixed assets, relevant for ports, oil and gas companies, and natural gas companies. More sector-specific concerns are a technological belief held by some motor vehicle manufacturers in the advantages of FCVs over BEVs for private mobility, which is held more widely regarding heavy road transport. Security of supply and diversifying the current business portfolio come up specifically for natural gas companies. Broader concerns about having to shift into other energy technologies as a core business are reasons for interest from the oil and gas sector, and ports.
Perhaps the most important lesson is that the hydrogen transition has already begun – but it needs continued policy support and political commitment. Carbon-intensive industries such as steel and chemicals are clearly interested and willing to invest billions, but need policy support to avoid carbon leakage to high-carbon competitors before they commit. The gas grid is ready, and many operators and utility companies are eager, but they need clearance to experiment with blending in hydrogen. Hydrogen road vehicles still face many regulatory hurdles. There are several clusters that can serve as models and nuclei for the future European hydrogen economy, in different parts of Europe. However, these nuclei will need more public funding and regulatory support for them to grow.
Link to document on Oxford Institute for Energy Studies website