The interest in hydrogen peaked in the past, yet it has never fully taken off. Hydrogen energy has long been a topic of conversation, presenting great potential but failing to achieve widespread adoption on the expected scale. However, interest in it has never disappeared. Today, technological advancements and the urgent need to significantly reduce greenhouse gas emissions are creating new opportunities. Many indicators suggest that we are approaching a turning point.

Hydrogen is experiencing renewed and rapidly increasing interest in Europe and globally. It can be used as a raw material, fuel or energy carrier and storage medium, with numerous possible applications across industry, transportation, energy and construction sectors. It offers a solution for decarbonizing industrial processes and economic sectors where reducing carbon emissions is both urgent and challenging. All these factors make hydrogen indispensable for supporting the European Union’s commitment to achieving carbon neutrality by 2050 and for contributing to the global effort to implement the Paris Agreement while striving for zero pollution.

There are many reasons why hydrogen is a key priority for the European Green Deal and Europe’s clean energy transition. Renewable electricity is expected to decarbonize a significant portion of the EU’s energy consumption by 2050, but not entirely. Hydrogen, alongside batteries and transport, has strong potential as a vector for renewable energy storage – helping to bridge this gap, provide seasonal storage and connect production sites to distant demand centers. Currently, hydrogen accounts for only a modest share of the global and EU energy mix and is still primarily produced from fossil fuels, particularly natural gas or coal. This results in annual CO2 emissions of 70 to 100 million tons in the EU alone.

For hydrogen to contribute to climate neutrality, it must be scaled up significantly, and its production must be fully decarbonized. Hydrogen can replace fossil fuels in some carbon-intensive industrial processes, such as the steel and chemical sectors, thereby reducing greenhouse gas emissions and further strengthening the global competitiveness of these industries. In addition to what can be achieved through electrification and other renewable and low-carbon fuels, hydrogen can provide solutions for the harder-to-decarbonize parts of the transportation system. The gradual adoption of hydrogen solutions could also lead to the repurposing or reuse of parts of the existing natural gas infrastructure, helping to prevent stranded assets in pipelines.

EU started transition

In the future integrated energy system, hydrogen will play a role alongside renewable electrification and more efficient, circular resource use. The rapid, large-scale deployment of clean hydrogen is critical for the EU to achieve its higher climate targets, reducing greenhouse gas emissions by at least 50% to 55% by 2030 in a cost-effective manner. The EU highlights clean hydrogen as one of the key areas to be addressed in the energy transition and discusses a range of possible pathways to support it. Europe plays a highly competitive role in clean hydrogen technology production and is well-positioned to benefit from the global development of hydrogen as an energy carrier.

Cumulative investments in renewable hydrogen in Europe could reach between 180 billion to 470 billion euros ($196 billion to $512 billion) by 2050, with an additional 3 billion to 18 billion euros for low-carbon fossil-based hydrogen. According to one analyst’s estimate, clean hydrogen could meet 24% of global energy demand by 2050, with annual sales reaching around 63 billion euros. The EU presents a vision for how clean hydrogen can become a viable solution for decarbonization across various sectors over time, with a target to install at least 6 GW of renewable hydrogen electrolyzers in the EU by 2024 and 40 GW by 2030. However, today, renewable and low-carbon hydrogen is not yet cost-competitive with fossil-based hydrogen.

To fully capitalize on all hydrogen-related opportunities, the EU and all states aiming to participate in the hydrogen market need a strategic approach. The EU industry is rising to this challenge and has developed an ambitious plan to reach the targeted electrolyzer capacity by 2030. Almost all member states have included plans for clean hydrogen in their national energy and climate plans. Türkiye and other states have already adopted or are in the process of adopting national strategies. Globally, 95% of hydrogen production comes from fossil sources such as natural gas and coal, known as "gray hydrogen.” The first challenge in making hydrogen a true catalyst for the green transition is scaling up clean hydrogen production from renewable energy sources.

The race for green hydrogen is intensifying, with Europe and the rest of the world increasing investments. The Finnish government plans to produce at least 10% of the EU’s green hydrogen by 2030 and double its current hydrogen use within the next decade. Finland’s strong low-carbon electricity production and wind energy expansion potential position it as a key player in both domestic and international hydrogen markets. Similarly, the Netherlands and Belgium are repurposing their extensive gas pipeline networks to adapt to the new era of carbon-neutral hydrogen, aiming to meet a significant portion of the EU’s hydrogen import targets. On the other hand, Germany’s industrial sector – particularly the steel industry – is committed to a dual strategy of increasing green hydrogen capacity through both domestic production and international imports. In the U.K., the government aims to achieve 5 GW of low-carbon hydrogen production capacity by 2030.

However, the path to a hydrogen economy is not without challenges. The production, storage and transportation of green hydrogen can lead to significant energy losses, with efficiency rates sometimes falling below 30%. Despite these obstacles, strategic investments in renewable energy infrastructure and international collaborations indicate a future where green hydrogen could become a cornerstone of the industrial sector’s sustainable transformation.

Türkiye holds potential

Given the ratification of the Paris Agreement, Türkiye will need more ambitious climate and energy transition targets for 2030 and 2050. Understanding hydrogen’s role in achieving these goals from different decarbonization perspectives is of critical importance. Türkiye holds significant advantages in future hydrogen markets. Its infrastructure for natural gas pipelines and existing ports, which could be used for hydrogen trade, as well as the current industrial demand for hydrogen and the availability of renewable energy sources, provide Türkiye with a competitive edge compared to other emerging economies. Integration with European natural gas and electricity networks and an aligned regulatory framework could help reduce the costs of developing a hydrogen economy. A cost-effective market strategy and affordable renewable energy could position Türkiye as a competitive player in the global hydrogen economy.

As investments in renewable energy accelerate, economies of scale will increase, making green hydrogen produced in Türkiye more competitive than in other countries, particularly in the Mediterranean and Black Sea regions. Based on its own priorities, Türkiye can utilize its green hydrogen potential to decarbonize end-use sectors and meet their growing energy demand. Alternatively, as different low-carbon solutions emerge for Türkiye’s energy system decarbonization, green hydrogen could also be used for export.

However, the deployment of hydrogen in Europe and globally faces significant challenges that neither the private sector nor governments can address alone. Moving hydrogen development beyond the tipping point requires critical mass investment, an enabling regulatory framework, new lead markets, continuous research and innovation in breakthrough technologies, the introduction of new solutions to the market, large-scale infrastructure networks and enhanced collaboration.