Europe is set to be the runaway leader for green hydrogen projects over the next five years, leaving the UK and US to play catch-up, according to law firm, Pillsbury.
In a report, which it shared exclusively with City A.M., it stressed the UK will likely struggle to gain on Europe, while the US – although in a good place to stimulate production through the Inflation Reduction Act – is likely to take time to catch up with the advantage that Europe has already established. The continent will play host to 53 out of 108 upcoming new green and low carbon hydrogen projects over the next five years, with 11 expected in the UK and 10 expected in the US.
As it stands today, Pillsbury highlighted that there are 94 operational zero and low carbon hydrogen production projects worldwide that are already producing hydrogen. Capacity is expected to more than double by 2028, with 326 clean hydrogen production projects either having been announced or at various stages of development.
When it comes to the electricity set to be produced from these projects over the next five years, Australia is set to provide 28GW by 2028, with the Netherlands (7GW), Ireland (4GW), China (2GW) and Spain (2GW) following behind. Germany has 25 current operational projects, followed by the UK, US and Japan – seven each.
The UK has failed to stimulate comparable activity to Europe – for example, it announced in March 15 applicants would share £37.9mn under its first hydrogen funding support, whereas Germany in contrast pledged $20bn in support of its hydrogen industry between 2024 and 2027, with $4bn earmarked for 2024. According to Pillsbury, the UK will “continue dropping down the pecking order, and possibly quite quickly” without change. It still lacks a coherent regulatory framework to give the sector much needed certainty.
The US, meanwhile, has an $8bn hydrogen hubs programme which has signalled its ambition and should unveil between six and 10 winners later in the year. While playing catch up, with Europe the first to roll out measures and now reaping the rewards, the US still looks well placed to catch up, with Pillsbury pointing out how thoughtful implementation of existing hydrogen incentives could see the gap closed swiftly.
