Water electrolysis and hydrogen in the European Union

Water electrolysis and hydrogen in the European Union

ID 25896 | 01.04.2026 / Attached

Status report on technology development, trends, value chains and markets 2025

This report from the Clean Energy Technology Observatory (CETO) updates the status of water electrolysers and hydrogen in the EU.

The EU's cumulative electrolysis capacity is projected to range between 514 MWel and 800 MWel by the end of 2025.

The EU's operational manufacturing capacity is estimated at approximately 8.9 GWel/year by the end of 2025, with a potential to reach 41.7 GWel/year by 2030 considering all companies’ announcements. While the EU leads in patenting activities, it faces challenges from state-backed competition, higher capital expenditure costs than anticipated, and critical dependence on imported raw materials. The European sector is supported by significant public funding, with instruments like the Innovation Fund and European Hydrogen Bank. CETO is being implemented by the Joint Research Centre for DG Research and Innovation Energy, in coordination with DG Energy.

Technology status

The report refers to the water electrolysis technology and does not cover chlor-alkali electrolysis technology. Other hydrogen production routes based on thermal or electrochemical decomposition
of waste is also out of the scope of this report.

Alkaline and Proton Exchange Membrane (PEM) electrolysis technologies have reached commercial maturity and are starting to being deployed in large-scale projects, with the largest operational
electrolyser in Europe more than doubling in capacity to 54 MWel in Germany, up from the 24 MWel electrolyser located in Norway described in the previous report. Anion Exchange Membrane (AEM)
and Solid Oxide (SOE) electrolysis technologies are now being deployed in industrial setting, with initial commercial applications and large-scale demonstrations planned of up to several megawatts
being commissioned this year.

Consolidated estimates shows that the EU27's total installed electrolysis capacity should range between 514 and 800 MWel by the end of 2025. Estimates for global electrolysis capacity
deployment range between 4.0 and 6.3 GWel, with China leading with capacities estimated between 2.0 and 4.4 GWel, highlighting significant discrepancies between available datasets. While the EU
leads in patenting activities, indicating a strong innovation ecosystem, China now leads in the volume of scientific publications.

Project costs (measured in terms of EUR per kW of electrolysis capacity) in Europe are proving higher than previously estimated, with recent data showing capital expenditures for large-scale projects, beyond 100-MWel, ranging from EUR 2630/kWel to over EUR 3050/kWel, influenced by inflation, underestimation of installation and connection to the grid costs, other indirect costs such as overheads, engineering, and a lack of manufacturing economies of scale.

Joint Research Centre 2025

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