However, the trade association warns that a shortage of investable hydrogen projects could leave factories underused and put Europe’s 2030 production ambitions at risk.
The EIC estimates that Europe’s maximum electrolyser manufacturing capacity is currently around 8.49GW a year.
That figure includes a 500MW-per-year Topsoe facility in Denmark that is currently hibernating, while some smaller manufacturers with undisclosed capacity are excluded.
The report found that only around 3GW of the 31GW of green hydrogen capacity planned across Europe for 2030 has reached a final investment decision (FID).
Without a substantial increase in projects reaching this stage, manufacturers could face weak order books in the near term, while the wider hydrogen sector struggles to scale.
Rebecca Groundwater, EIC’s Global Head of External Affairs, explained: “Europe has already invested in electrolyser manufacturing capacity, and policy now needs to turn project pipelines into firm demand.
“That means faster decisions on support schemes, clearer long-term rules for offtake and coordinated investment in transport and storage.
“Without that certainty, projects will keep slipping, factories will remain underused, and the 2030 targets will become harder to reach.”
Hydrogen projects are failing to reach investment
Europe has announced hundreds of hydrogen projects, but relatively few have progressed far enough to underpin equipment demand.
EICDataStream has recorded 624 hydrogen projects announced since 2020, spanning production facilities, pipelines, storage and other infrastructure.
Only 59 are operational, while 74 have been cancelled. Of the remaining projects, almost half are still at the feasibility stage, and a further 15% are on hold.
The problem is not simply a lack of proposed projects. Developers continue to face high hydrogen production costs, uncertain demand and changing regulation.
Crucially, many projects lack long-term offtake agreements that can provide investors and lenders with confidence over future revenues.
This creates a circular problem for the sector. Insufficient demand discourages investment in hydrogen production, while weak project pipelines make it harder to justify further investment in electrolyser manufacturing capacity.
Electrolyser supply could tighten after 2029
The EIC expects European manufacturers to be capable of fulfilling anticipated orders during 2027 and 2028, when the market is likely to remain oversupplied.
That picture could change from 2029 onwards. If a significant number of proposed hydrogen projects secure FIDs, demand for electrolysers could rise rapidly, potentially exposing manufacturing constraints.
Six major manufacturers, including ITM Power, John Cockerill, Nel, Sunfire, Thyssenkrupp, and Topsoe, formed the Electrolysers4Europe coalition in February to push for stronger hydrogen demand, clearer regulation and more targeted financial support.
The EIC estimates that Europe’s wider project pipeline represents around 72GW of proposed electrolyser capacity and approximately $269bn in potential capital expenditure.
However, these figures represent proposed developments rather than committed investment or confirmed equipment orders.
UK risks missing its 2030 hydrogen target
The UK has Europe’s largest national hydrogen project pipeline, with 130 proposed developments. Yet only 8% are under construction or awaiting construction, while 21% are currently on hold.
The EIC forecasts that the UK could reach 3.66GW of electrolytic capacity by 2030, more than 1GW below the Government’s 5GW target.
Delays to the second Hydrogen Allocation Round and the lack of a revised hydrogen strategy are adding to uncertainty for developers, manufacturers and investors.
Germany appears further advanced. Of its 87 proposed projects, 23% are under construction or awaiting construction, the highest proportion among the major European markets assessed.
Its planned 9,000km Hydrogen Core Network and connections for imported hydrogen could also position the country as a major demand centre.
Europe needs projects, not just manufacturing capacity
Spain has 54 proposed hydrogen projects, supported by strong renewable energy resources, but 60% remain at the feasibility stage. Scandinavia has 76 projects, with 18% under construction or awaiting construction and another 17% on hold.
The EIC’s findings suggest that Europe’s immediate hydrogen challenge is not primarily electrolyser manufacturing capacity. It is turning ambitious project pipelines into financed, contracted developments.
Unless FIDs accelerate sharply, manufacturers could face underused facilities and weak demand in the short term.
If investment does accelerate, however, the sector may move from surplus capacity to a potential manufacturing bottleneck within just a few years.
For Europe to meet its hydrogen ambitions, the report makes clear that having the equipment to produce green hydrogen is only part of the equation.
The industry also needs the buyers, infrastructure and investment frameworks capable of putting that equipment to work.
