El Mundo: Investment in hydrogen is growing, but we must avoid a domino effect that delays projects

A couple of years ago, hydrogen was one of the most repeated words in the economic press, much like AI or competitiveness are today. The war in Ukraine and Russia’s energy blackmail elevated this new fuel to a strategic priority across the European Union, as the molecule emerged as a lever for energy independence for the Twenty Seven. Spain led that trend and still does. The country accounts for 20 percent of European green hydrogen projects. Major players are behind the largest developments, which are beginning to shape the market. Moeve has committed 3 billion euros to its Andalusian Hydrogen Valley, Repsol recently approved its first large electrolyzer, and Enagás is advancing the initial phases of the H2Med mega corridor to transport Spanish hydrogen molecules to the rest of Europe.

But today this technology no longer dominates the financial headlines. Cheap natural gas is once again flowing into Europe from the United States, and many of the plans announced in that earlier context are facing the hard reality of economics that in many cases do not yet guarantee viability. Ivana Jemelkova, CEO of the World Hydrogen Council, analyzes the state of the market for EL MUNDO. She does so from the vantage point of a global organization founded at the Davos Forum in 2017 that brings together 140 companies from different countries and sectors.

Question: What stage is the hydrogen market at now?
There is a lot of noise and it is difficult to have a clear picture of what is progressing and what is not. We track all announced projects, more than 1,700 worldwide, and we can see quite precisely where investment is going and what is driving it. Overall, there is growth. Committed capital has increased to 110 billion dollars. What is exciting is not the number itself but the trajectory. That is 35 billion more than last year and ten times more than in 2020. Not everything is perfect. In the scaling phase of any technology there is always a natural filtering process. That is happening now. The pipeline includes hundreds of projects, and not all of them will succeed.

Question: In Europe, there has been a shift from euphoria to screening. Does that concern you?
We are now in that filtering phase because companies are facing economic reality. They must make firm decisions about how to allocate capital. Developers who began with broad portfolios full of ideas are now trying to focus. But that is positive. The same happened with solar and wind. In the end, what remains are solid projects with business models that can move forward. That leads to stronger portfolios.

Question: What signals should investors and governments consider to identify viable long term projects?
This is not yet a consolidated industry, but it is not a disaster either. It is a normal industry under construction. We have counted at least 52 cancelled projects in the last eighteen months. That has generated many negative headlines, but it does not mean the technology is failing. Out of 1,700 projects, 510 have already secured firm capital commitments or are under construction. That is five times more than in 2020. The trajectory is similar to the early days of solar and wind. I have heard it said that our biggest enemy right now is indecision. Some projects are being delayed because the infrastructure needed to connect them is also delayed. It is a domino effect and it is critical to prevent that. We need to keep moving forward.

“The industry is going through a phase of natural project selection, but that is positive because the technology works.”

Question: How are different geopolitical blocs progressing in mobilized hydrogen investment?
China has emerged as the dominant force, with 33 billion dollars, about one third of global investment. North America follows with 23 billion, leveraging abundant natural resources, industrial expertise, technical capacity, and existing infrastructure. They know how to handle molecules, and this is simply another one.

Question: Where does Europe stand?
Unfortunately, it is falling in the rankings and is now in third place, with around 19 billion dollars in committed capital. This is one of the great paradoxes. Europe has everything it needs to succeed in hydrogen, especially Spain. But progress is slow. Processes are cumbersome and complex, and we are not seeing the level of momentum we should. Europe is projected to be the main global hub of hydrogen demand by 2030. It is an extraordinary opportunity, but it must accelerate and commit if it wants to capitalize on its strengths. That would benefit the climate, security, jobs, and industrial competitiveness. Hydrogen can contribute to many of the European Union’s current priorities.

Question: What explains China’s success?
China has made hydrogen a strategic priority and is acting accordingly. It understands what it takes to build a globally competitive industry because it has done so before with photovoltaics and other technologies. It leads not only in total investment but also in renewable hydrogen production capacity. Its technology is advancing quickly and with quality. Government support and regulatory frameworks are aligned. There is strong domestic demand, and state owned enterprises have been mobilized to overcome early deployment barriers. China is serious. I saw it myself in Shanghai earlier this year. The scale and speed are striking. Europe should show the same determination. We want to lead this industry and we have the necessary elements. We cannot hesitate or try to regulate for a perfect world. We need to launch the market. The rest of the world is moving and Europe cannot afford to waste time.

“Europe must stop trying to regulate for a perfect world and launch the market because the world is moving.”

Question: What role will hydrogen play in the green transition compared with direct electrification?
In energy there are no magic solutions and nothing is free. The energy mix has always been and will remain diverse. That is where hydrogen stands out. It can make the system cleaner, faster, and more efficient.

Question: How?
It helps integrate large volumes of renewable energy, connect energy transport, and make the overall system more efficient. As a molecule, it allows the use of two infrastructures instead of one, which can be more economical, especially in Europe where grid modernization for electrification is very costly. European government budgets are tight. Hydrogen can also help preserve jobs because it mobilizes industrial capacity, and European engineers are strong in developing hydrogen technologies. We must ensure that this industry continues to move forward. Hydrogen is not a single solution that will solve everything, but it is a powerful enabler and connector.

Question: With gas now cheap again, is that bad news for hydrogen?
Who has a crystal ball to tell us what the world will look like in five years? Energy demand continues to grow, and there is space for multiple solutions. Decisions are made from different perspectives. Sometimes cost matters most, but sometimes value does. The value of a molecule may lie in coming from a reliable trading partner, being produced locally, or strengthening industrial competitiveness.

We published a report earlier this year showing that activating key legislative tools would significantly advance the market. The US tax credit model and contracts for difference schemes in Japan and Korea would unlock major hydrogen demand by 2030, supporting viable and cost competitive business models. Not necessarily the cheapest, but competitive in terms of the value they provide. For years, articles claimed renewables were too expensive and would never work. As recently as 2010, that argument appeared in publications such as MIT Review, The New York Times, and Forbes. Today we read similar arguments about hydrogen. I hope we have learned the lesson. The cost of clean energy solutions is only a snapshot in time. If the production cycle begins, cost competitiveness can be achieved relatively quickly.