The 2030 clock is ticking for green hydrogen

Part 1 of 3: Meeting the hydrogen mandates in time

Europe’s hydrogen market is no longer waiting for demand to appear. The Nordic Ren-Gas billion EUR offtake deal shows that demand for hydrogen and green fuels will be real for 2030. It also raises the question if there will be enough supply, as the final investment decisions are still few and pending.

e-Methane demand is driven by EU level and national mandates

Under Renewable Energy Directive RED III, at least 1% of transport energy must come from renewable fuels of non-biological origin (RFNBOs) by 2030. In addition to EU-level, its member states are developing mandates that are considerably firmer. Germany’s draft law backs its sub-quota with a penalty of €120 per gigajoule. France follows at €110. Aviation and shipping have their mandates too, through ReFuelEU Aviation and FuelEU Maritime.

The hydrogen industry has been talking about “the carrot and the stick”. The regulation-driven RFNBO demand is driven by the latter. In road transport alone, the demand expected to exceed 30 TWh annually by 2030. That demand doesn’t depend on subsidies or goodwill. It depends on penalties nobody wants to pay.

Supply needs to pick up

Unfortunately, the supply isn’t on track. According to the EK’s database, announced projects are many, but the investment decisions are few. Considering the lead time from investment decision to starting production – the math is brutal. Development to final investment decision typically takes two to three years. Construction takes another two to four. This leads to the situation where supply needs to pick up.

A hydrogen project that doesn’t reach FID soon will not deliver a single certified megawatt-hour before the 2030 mandates apply

Investment decisions need to be made

So why do good projects stall? Rarely because of the technology. Electrolysis, methanation and carbon capture are proven. Projects stall on money and time: rising CAPEX estimates, financing gaps, and the long path from grid connection application to a working connection.

Every power-to-X plant is a heavy industrial site — tens or hundreds of megawatts of connection capacity and related electricity infrastructure. It’s a major part of the investment, and it’s usually not the developer’s core competence. But the electrical infrastructure part is Aurora Infrastructure’s core business. With decades of experience in designing, financing, building, owning and operating industrial-scale electrical infrastructure for demanding industrial customers, we think there’s a smarter way to invest.

Got interested? Then let’s talk!

In the next post, we’ll look at how taking electrical infrastructure off a hydrogen project’s balance sheet can speed up hydrogen investments — and why 2026 is the year to do it.