A European mechanism to bridge the cost gap
The EHB, established by the European Commission, aims to close the cost gap between renewable hydrogen production and market demand through competitive auctions and targeted support schemes. European Energy already operates two Power-to-X facilities in Denmark: a green hydrogen production unit in Esbjerg and a facility at Kassø, jointly owned with Mitsui & Co. Ltd., producing e-methanol. Rene Alcaraz Frederiksen, EVP and Head of PTX at European Energy, states that the support “enables further expansion of hydrogen production connected to Kassø and contributes to strengthening Europe’s renewable fuels infrastructure.”
The company believes the award should accelerate progress on the planned hydrogen pipeline between Denmark and Germany. European Energy notes that commitments from both Danish producers and German off-takers reflect a growing maturity in the market. Rene Alcaraz Frederiksen calls on the incoming Danish government to commit to constructing the hydrogen infrastructure needed to transport production to German buyers.
RFNBO obligations driving German demand
On the demand side, Germany is tightening its requirements for renewable fuels of non-biological origin (RFNBO). Regulations require 0.1% of all road fuels placed on the German market to be RFNBO-certified from 2026, with the target rising to 1.5% by 2030 and reaching 10% by 2040. European Energy identifies growing demand for renewable hydrogen and hydrogen-based products such as e-methanol, particularly in sectors where direct electrification is difficult, including shipping and industrial processes.
Rene Alcaraz Frederiksen also calls on the Danish government to adopt ambitious targets for green fuels uptake, following Germany’s example. The company indicates it holds a broad Power-to-X portfolio including projects under development across Europe, North America, Brazil and Australia. The future Kassø capacity is positioned as a link in a renewable fuels supply chain aimed at supporting the decarbonisation of European transport.
