Electrolyser maker Sunfire says Europe must decide which industrial market it wants to make commercially viable for green hydrogen next, as Renewable Energy Directive (RED) III mandates begin to provide a first layer of demand certainty.
CEO Nils Aldag told H2 View abandoning ambitions for green hydrogen in industrial segments would leave the sector without a clear route to its next stage of growth.
Despite major markets like Germany and Spain having now transposed transport targets, Aldag said, “The big European markets that haven’t transposed RED III into national law [need to] do that,” pointing to countries like France, the Netherlands, and Belgium.
The directive establishes consumption targets for renewable fuels of non-biological origin (RFNBOs) for transport, equivalent to 1% of transport energy in 2030. It also requires RFNBOs to account for at least 42% of hydrogen used in industry by 2030.
While the transport targets have started to unlock demand from refineries and synthetic fuel production, implementation has been uneven.
The European Commission set a May 2025 deadline for member states to transpose the provisions. To date, just a handful of countries have done so, with the industrial target yet to be translated into national demand mechanisms across much of the bloc.
Member states also have freedom over how they meet the 42% industrial goal, including how much of the obligation is ultimately placed on individual hydrogen consumers.
The Netherlands, for example, is developing an annual RFNBO obligation for industrial hydrogen users backed by tradable certificates. But its planned company-level requirement reaches just 4% in 2030 – far below RED III’s 42% national target.
Others are yet to set out how they will translate the target into national demand.
But Aldag said abandoning the industrial ambition altogether would be a mistake.
“There was a great ambition with RED III industry,” he said. “We all know that this is challenging for member states to comply with, but just completely giving up can’t be the answer. This is not ambitious enough.”
For Aldag, the question is which industrial market policymakers can make commercially viable next.
“We need to define what is the next market we want to target with reduced green hydrogen costs, and further support from governments in Europe,” Aldag said.
He said hydrogen’s wide range of potential applications had made reaching those decisions more difficult.
“There are so many different things we can do with hydrogen,” the CEO said. “This has always been a great benefit, but also a great complicator in the discussions.”
And rather than attempting to stimulate all of those markets at once, he wants industry and governments to align around the next use case where policy support and falling costs could bring green hydrogen to commercial viability.
“We need to find what is the next market we want to enable, open up for green hydrogen, after this first one,” he said.
