European Hydrogen: Stagnation Or Acceleration?

Key Points

We discuss the recent German election, as we think the new coalition will mostly continue Germany’s hydrogen ramp-up. However, it will likely lift German support for blue hydrogen and nuclear-derived hydrogen imports.
We highlight Repsol comments from their 4Q24 earnings call regarding their clean hydrogen ambitions, its more positive view of hydrogen demand for fuel than steel, cement, and chemicals, and Spain’s H2 hub grant shortlist.
We provide takeaways from the Air Liquide 4Q24 earnings call, including commentary regarding its hydrogen expansion plans in Europe. We flag its partnership with TotalEnergies, which seeks to decarbonize its refineries.
Overall, we continue to see Europe in transition amid high costs and weak demand. We also expect domestic green hydrogen FIDs delays until incentives align in the right areas or prices move significantly higher.
Otherwise, we discuss recent movements in global ammonia and methanol spot markets, our hydrogen cost estimates across regions, and surging prices for high voltage direct current converter stations in Europe.

Exhibit 1: European fuels policy is set to boost clean hydrogen demand, lifting supply from domestic and foreign sources.