Letter on hydrogen: Leading the way to demand

The creation of ‘lead markets’ to generate hydrogen demand in the EU has potential, but implementation would pose complex challenges for producers and industrial offtakers

The EU has spent about five years devising policies to support the growth of clean hydrogen production with ever-increasing amounts of public money. It has circumvented rules on state aid to allow direct grants to hydrogen projects and even created a European Hydrogen Bank, through which developers can bid for subsidies to bridge the gap between real costs and the price that end-users are willing to pay. Gradually, the focus of policymakers has switched to the demand side as the lack of offtakers has deterred investment and forced some developers to abandon projects, sometimes even after the start of construction. The IEA has been flagging concerns about the lack of measures to support deman