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Jorgo Chatzimarkakis, CEO of Hydrogen Europe

Challenge of lack of hydrogen regulatory framework has been overcome: Jorgo Chatzimarkakis (Hydrogen Europe)

In an interview for Review Energy, Jorgo Chatzimarkakis, CEO of Hydrogen Europe, points to the passage of legislation, including the Renewable Energy Directive (RED) and the launch of the European Hydrogen Bank, as key turning points. These events set a clear direction for the industry, but face the critical barrier of investment decision making, with only 4% of projects progressing to the investment stage. The trend of rapid project expansion contrasts with the pressing need to see a significant increase in final investment decisions by 2024.

Green hydrogen market trends are evidenced by an impressive portfolio of projects in Europe, spanning the entire hydrogen value chain. Despite this expansion, the lack of investment decision-making presents a crucial challenge. Even so, public funding has experienced ups and downs, where the US Inflation Reduction Act (IRA) has raised awareness of the risk of losing the European lead in the hydrogen sector. Efforts by the EU and national support schemes, such as Germany's H2 Global, together with successful auctions in Denmark, stand out as crucial measures to financially support hydrogen projects and maintain momentum in the sector.

These prospects outline a scenario where the need to accelerate investment decisions becomes critical as the hydrogen industry expands rapidly. In addition, financing and training of skilled personnel are key challenges that need to be addressed to further boost the growth and development of green hydrogen.


Review Energy (R.E.): What would be the most relevant milestones for the green hydrogen industry in 2023?

Jorgo Chatzimarkakis (J.C.): The passing of major legislation concerning hydrogen (RED, AFIR, gas package...) as well as the launch of the European Hydrogen Bank.


R.E.: How do you perceive current trends in the green hydrogen market?

J.C.: Project announcements are coming fast and there is a massive pipeline of projects in Europe across the hydrogen value chain (hydrogen production, infrastructure, mobility, end-use...). One negative trend is that only 4% of these projects are reaching final investment decision (FIDs). We need to see an uptick of FIDs in 2024.


R.E.: What is your opinion on the development of public funding in the US and other countries?

J.C.: The US Inflation Reduction Act was a bit of a shock to the system of European industry and policy makers, who realised there was a risk of Europe's advantage in hydrogen slipping away.

The announcement of the EU Hydrogen Bank, as well as domestic support schemes like Germany's H2 Global and Denmark's successful hydrogen auctions, will be key to providing public support to hydrogen projects.


R.E.: What key investments or projects in 2023 significantly impacted industry growth?

J.C.: NEOM reached financial close on a massive hydrogen project in Saudi Arabia, providing project developers with a roadmap of sorts in how to attract private financing to your hydrogen project.


R.E.: What measures are being taken to reduce the costs associated with green hydrogen production and which ones do you think have the most room for improvement?

J.C.: Costs will come down with scale and innovation, as with any new industry. In the meantime, public support mechanisms like the EU Hydrogen Bank, will be key to keeping costs lower.


R.E.: What challenges were overcome and which ones still remain?

J.C.: We have overcome the challenge of not having any regulatory framework for hydrogen. The main pillars are now in place with RED, AFIR, NZIA, gas package, and other directives and regulations.

What remains is the financing gap and the skills gap (we need to train enough people to be qualified to work in the hydrogen sector).


R.E.: After one year of H2MEd, what is the outlook?

J.C.: It was announced in January that the Franco-Spanish H2Med pipeline project, which aims to transport 10% of the bloc's decarbonised hydrogen by 2030, would be extended to Germany. The project is awaiting a decision on inclusion as an Important Project of Common European Interest (IPCEI), which would greatly help its development.


R.E.: Isn't replacing natural gas infrastructure to support hydrogen complicated?

J.C.: No, in fact it's quite easy to adapt existing gas infrastructure to be suitable for hydrogen – which is why we see this as a great opportunity not to have to build new infrastructure completely from scratch.


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