Montel Questions Whether Europe's Green Hydrogen Push Can Survive Its Delivery Gap
Only 7% of globally planned green hydrogen projects were realised in 2023, as high electricity costs set a production floor that cheaper electrolysers cannot resolve alone.
On Wednesday (2026-09-16), Montel published an analysis by market expert Jake Thompson examining whether renewable hydrogen can live up to the expectations placed on it in Europe's decarbonisation debate. That debate has run for years, with hydrogen discussed as potentially central to the energy transition. The project delivery data have begun to test the premise.5
The numbers are not generous to the sector. A 2025 study tracking 190 green hydrogen projects over three years found that only 7% of globally planned capacity was actually brought into production in 2023 — less than a tenth of what developers and governments had communicated to markets and policymakers.3
The cost structure explains much of the shortfall. Electricity typically accounts for between 60% and 70% of green hydrogen production costs, according to analysis of UK hydrogen economics. Electrolyser stack costs may continue falling. But those savings address only the smaller portion of total production expense. There is a practical floor beneath which green hydrogen costs struggle to fall, and that floor is set by power prices, not equipment manufacturers.1
ICE Endex TTF front-month gas closed on Tuesday (2026-09-15) at €80.08/MWh, down 3.45% on the session. THE M+1 closed the same session at €80.98/MWh, off 4.61%. Those levels keep European electricity expensive enough to sustain pressure on producers trying to close offtake agreements at workable margins. Autumn gas price direction will influence any planned capacity pencilling out before project windows expire.1
The danger, as analysts examining UK hydrogen economics have noted, is that policymakers become absorbed in hardware cost curves while underweighting the power price floor. Both need to move. Cheap and abundant electricity is harder to legislate than a manufacturing subsidy.1
One financing model drawing attention is LNG. The POSCO Research Institute argues hydrogen can scale by adopting take-or-pay contracts, LNG-style risk-sharing, and a phased infrastructure approach. That framework allowed liquefied natural gas to cross from speculative technology to global commodity over several decades. But LNG arrived with deep industrial demand pools in Asia and creditworthy long-dated offtakers already in place; green hydrogen's demand base remains largely policy-mandated rather than commercially self-sustaining.4
A separate path that avoids the electricity cost problem entirely is geologic hydrogen. Natural, or white, hydrogen does not require large volumes of renewable power for production, giving it a structurally different cost profile from the electrolysis route. Its appeal to those frustrated by green hydrogen's power dependency is clear. Commercial-scale extraction remains unproven, though, and the geological prospects drawing explorers have no established route to supply at volume.2
Researchers in Germany reported in July (2026-07-01), according to oilprice.com, a highly efficient method for converting sunlight directly into hydrogen fuel. The outlet described the work as potentially addressing some of the green hydrogen sector's most persistent efficiency challenges, with applications in heavy industry among those cited. The technique is not yet at commercial deployment scale.3
The gap between announcement and delivery is the number that hangs over the industry. In 2023, 93% of planned green hydrogen projects went unbuilt. European policy support has sustained a pipeline of announcements, but announcements are not production capacity. If project realisation rates for 2024 and 2025 do not improve materially on that figure, the hydrogen volumes embedded in Europe's decarbonisation plans will need to be revised downward.3,5