As President Donald Trump rushes to kill clean energy projects, the new European Commission is racing ahead to reach its ambitious green goals. It’s an opportunity for Europe to take the lead. A good test will be its plans to promote green hydrogen.

Upon moving into the White House, President Trump ended the Biden administration’s last-minute tax incentives for clean hydrogen investments. His series of executive orders repealed regulations aimed at promoting electric vehicles, opened vast areas of public land and federal waters for oil drilling and mining, and ordered the withdrawal of the US from the Paris Agreement on global warming.

China and Europe are sprinting in different directions on green policy. China is home to nearly two-thirds of all the world’s utility-scale solar and wind projects under construction – and it smashed its hydrogen 2025 production targets ahead of schedule. The European Commission is expected to unveil on February 26 its much-anticipated Clean Industrial Deal, a multi-year plan to boost the continent’s clean technology sectors.

Hydrogen will be key to European ambitions. In her recent speech at the World Economic Forum in Davos, Commission President Ursula von der Leyen signaled that infrastructure – including upgraded natural gas pipes to carry hydrogen – will be at the heart of the energy plan. “Not only must we continue to diversify our energy supplies and expand clean sources of generation, [but] we must also mobilize more private capital to modernize our electricity grids and storage infrastructure,” she said.

By 2030, the European Union aims to produce 10m tons of green hydrogen domestically, requiring an additional 500 TWh of renewable electricity annually – roughly the equivalent of Germany’s power consumption. Under the Renewable Energy Directive, at least 42% of hydrogen used in industry, and 29% in transport, must be renewable by 2030. These are binding targets.

Germany is leading the way. In October, its regulator approved plans for updating 9,000 kilometers of natural gas pipelines into hydrogen pipelines. Spain and Portugal hope to harness their abundant solar and wind resources to position themselves as green hydrogen exporters. Poland, reliant on coal, sees hydrogen as an opportunity to transform its industrial landscape, earmarking €640m for hydrogen technologies from its EU Covid recovery funds.

Renewables-generated hydrogen produces no carbon dioxide. Unlike wind or solar, it can be stored for future energy needs and transported through pipelines. The hurdle is the high cost. New pipelines and storage facilities must be built. Hydrogen must be integrated into existing energy systems. Current green hydrogen production costs hover within the range of $3.74 to $11.70 – far above the price of natural gas.

The price tag for future imports of hydrogen derivatives, central to Germany’s energy strategy, are expected to be even higher. Policymakers are banking on subsidies and carbon pricing to close the gap. Only a rapid scale-up and cost reductions can address the risk of clean hydrogen stalling at the starting line.

Geography adds complexity. Some EU countries, like Germany and the Netherlands, can develop salt caverns for hydrogen storage, while others lack this advantage. This uneven distribution could skew hydrogen production and consumption, deepening regional inequalities.

Another problem concerns Europe’s ability to generate enough green electricity, needed to produce green hydrogen. Demand for renewable electricity is soaring, driven in part by the required decarbonization of the EU’s steel industry. The EU Court of Auditors is skeptical about the continent’s ambitious plans, which it deems unrealistic.

As the clock ticks, Europe’s hydrogen push will be a litmus test for its ability to lead on fighting climate change, standing up to the US retreat. The continent has an opportunity to become a Green tech leader. Clean hydrogen could become a linchpin of this green future – or an unrealized promise.

Maciej Bukowski is a non-resident fellow with the Tech Policy Program at the Center for European Policy Analysis (CEPA). Maciej is a climate diplomacy and energy security expert, and a PhD candidate at the Institute of Political Science and International Relations at the Jagiellonian University in Cracow.  

Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions are those of the author and do not necessarily represent the position or views of the institutions they represent or the Center for European Policy Analysis.

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