High costs have long slowed the adoption of green hydrogen projects, but new European Union (EU) regulations for the refining sector are emerging as a catalyst for scaling up this carbon-friendly technology, according to a new Horizons report from Wood Mackenzie.
The report, “Isn’t it ironic? How Europe’s oil refiners could offer a route to scale up green hydrogen”, highlights that European refiners will require around 0.5 million tonnes of green hydrogen annually by 2030 to comply with EU rules, replacing nearly 30 percent of current CO₂-emitting hydrogen production. Refining, together with ammonia and methanol production, accounts for 98 percent of global hydrogen demand, making it one of the largest markets for decarbonisation.
Refiners Drive Early Market Appetite
The EU’s Renewable Energy Directive (RED III) is tilting policy support toward green hydrogen over blue hydrogen, providing the certainty needed for investment. European refiners have already committed more than US$5 billion to low-carbon hydrogen projects, representing a major share of the 6 Mtpa of hydrogen capacity that has reached final investment decision (FID).
EU Hydrogen Bank auction results further confirm this momentum. Refineries demonstrated the strongest market appetite, with bids reflecting a willingness to pay premium prices at an average US$9.23/kg. By comparison, Wood Mackenzie’s asset-level modeling suggests costs of US$7.04–8.30/kg, aligning closely with refinery demand and underscoring their need to comply with strict emissions mandates.
Encouragingly, the latest EU auctions saw green hydrogen costs drop 18 percent, with German bids down more than 55 percent, indicating improving competitiveness across projects.
Long-Term Opportunities in Transport Fuels
While near-term opportunities lie in refinery decarbonisation, long-term growth for green hydrogen projects is expected in marine and aviation fuels.
The EU’s ReFuelEU Aviation framework requires 6 percent of jet fuel demand to be met by sustainable aviation fuels by 2030, with 1.2 percent from green hydrogen-based e-fuels. By 2050, mandates could demand 8 million tonnes of green hydrogen, a market growing at a 15 percent CAGR.
In shipping, the FuelEU Maritime Regulation and International Maritime Organization’s Net Zero Framework are pushing adoption of hydrogen-derived fuels to meet strict decarbonisation targets.
These hard-to-electrify sectors are seen as the largest long-term consumers of hydrogen derivatives, positioning green hydrogen as a cornerstone of the EU’s net-zero ambitions.
Policy Gaps Still Holding Back Deployment
Despite clear momentum, challenges remain. Current EU policy requires renewable fuels of non-biological origin (RFNBOs) to make up just 1 percent of transport energy use by 2030, a modest target that risks slowing deployment. Moreover, the uneven pace of national adoption of RED III legislation is creating uncertainty, delaying projects across multiple member states.
Wood Mackenzie concludes that while European refiners are well-positioned to scale up green hydrogen projects, continued cost reductions and stronger policy frameworks are essential to unlock the full potential of hydrogen across refining, aviation, and shipping.
Green hydrogen may still face high costs, but Europe’s refiners are proving that regulatory mandates, combined with rising investment, could finally accelerate this critical clean energy technology.
Major Green Hydrogen Projects in Europe & Recent Highlights
Air Liquide & TotalEnergies – Netherlands
Two large-scale low-carbon hydrogen production plants are in development:
A 200 MW electrolyser in Rotterdam, powered by offshore wind and set to begin operations by end of 2027.
A 250 MW electrolyser in Zeeland, developed via a joint venture.
Combined investment by both partners exceeds €1 billion, aiming to reduce CO₂ emissions (especially from TotalEnergies’ refineries) by up to 450,000 metric tons annually.
TotalEnergies & Air Products – Green Hydrogen Supply
A landmark 15-year agreement secured for delivering 70,000 tonnes of green hydrogen per year to TotalEnergies’ European refineries starting in 2030.
Targets a CO₂ emissions reduction of around 700,000 tonnes annually, aligning with a net GHG reduction goal of 40 percent by 2030, Wall Street Journal reports.
Statera Energy – Kintore (Scotland)
Plans for Europe’s largest green hydrogen project in Aberdeenshire: 500 MW capacity by 2028, with expansion to 3 GW later in the decade.
Could generate up to 3,500 jobs during construction and 200 permanent roles. Final investment decision expected by 2026, contingent on government support.
RWE – Grangemouth (Scotland)
Developing a 200 MW green hydrogen plant, expandable to 600 MW, located at Grangemouth industrial complex.
Expected to supply INEOS with hydrogen to help meet its Net Zero 2045 target, with operations commencing by 2029.
De Nora Electrolyser Gigafactory – Italy
Constructing Italy’s largest electrolyser manufacturing plant (~€100 million), aiming for operation by late 2025 to early 2026.
Has already received orders for 2 GW capacity, aligning with projected EU-wide needs of over 100 GW by 2030, Reuters reports.
GreenH2Atlantic – Sines (Portugal)
Developing a 100 MW electrolyser at a decommissioned coal-fired plant; powered by wind and solar, hydrogen will serve a local refinery and blend into the gas grid.
Supported by €30 million from Horizon 2020; seeks to lower production costs and support hydrogen value chain scaling.
GreenHyScale – Denmark
Planning the world’s first 100 MW green pressurised alkaline electrolyser at GreenLab, converting a 6 MW prototype into full scale.
Aims to drive scalable hydrogen infrastructure; backed by €30 million in EU funding, with major industry partners onboard.
HySynergy – Everfuel, Denmark
The HySynergy plant in Fredericia began operation in December 2022 with a 20 MW capacity, near a refinery; the goal is to scale up to 1 GW by 2030.
Focuses on commercial hydrogen production and refueling infrastructure for heavy vehicles.
Iberdrola – Puertollano (Spain)
Launched a 20 MW green hydrogen facility in May 2022, powered by solar electrolysis to support fertilizer production, reducing natural gas use by 10 percent and CO₂ emissions by 39,000 tonnes/year.
MOL Group – Százhalombatta (Hungary)
Opened Central and Eastern Europe’s largest green hydrogen plant: 10 MW capacity, producing ~1,600 tonnes/year and reducing refinery CO₂ by 25,000 tonnes annually.
Njordkraft – Denmark → Germany
Planned 1 GW green hydrogen project in Esbjerg, Denmark, linking North Sea wind with Germany’s heavy industry demand; expected to produce ~135,000 tonnes/year.
Now in financing and procurement stages, following permitting and engineering milestones.
Anker – Germany
Proposed facility in Sande with initial capacity of 400 MW, expandable to 800 MW; aims to produce 80,000 tonnes/year and cut CO₂ by 2.4 million tonnes annually.
Will harness solar and both onshore/offshore wind power.
Hyval – BP (Spain)
Ambitious 2 GW electrolyser project planned at Castellón refinery by 2030, expected to triple biofuel production to 650,000 tonnes/year across regional industries.
Andalusian Green Hydrogen Valley – Cepsa/Moeve (Spain)
A massive 2 GW project across Huelva and Campo de Gibraltar, backed by €3 billion; production target of 300,000 tonnes/year.
Envisions transforming Andalusia into a “European energy power.”
BrintØ – Hydrogen Island (Denmark)
Proposed 10 GW hydrogen island in the Danish North Sea, targeting ~1 million tonnes/year (≈7 percent of Europe’s 2030 demand).
Includes Power-to-X facilities and pipeline export infrastructure.
NortH2 – Netherlands
Consortium of Eneco, Equinor, RWE, and Shell aiming for 2-4 GW by 2030, scaling to 10 GW by ~2040 (750,000 tonnes/year).
Will convert wind energy in Eemshaven to hydrogen, integrated into Dutch and NW European networks.
H2 Green Steel – Sweden
A pioneering green steel plant in Boden with 800 MW electrolyser capacity, producing 2.5 million tons of green steel starting in 2025.
Over €6.5 billion secured in funding, including €250 million from the EU Innovation Fund.
REFHYNE – Germany
Shell’s Wesseling (Rhineland) refinery hosts Europe’s largest PEM electrolyser, supplied by ITM Power.
An extension, REFHYNE II, proposes a 100 MW electrolyser pending FID; ambition to replicate across industrial sites.
SALCOS – Germany (Salzgitter)
Green hydrogen production using waste heat and alkaline electrolysis; 100 MW capacity by 2026.
Could lower CO₂ emissions by 95 percent (~8 million tonnes/year), supported by €1 billion in state incentives.