The energy sector has entered 2025 in the midst of an unprecedented change. The urgency of climate change and the EU’s commitments to decarbonisation have led to the creation of a regulatory framework that is constantly being redefined.
In particular, renewable hydrogen is positioned as a fundamental pillar of this transformation, and current regulations coupled with those that will come into force in the coming years will play a crucial role. Below we explore the key regulatory developments expected in 2025 and how they will impact companies and operators in the energy sector.
According to Hydrogen Europe’s latest report “Clean Hydrogen Monitor 2024”, hydrogen consumption in Europe reached 7.9 million tonnes in 2023, of which 96% was produced from natural gas. This represents a major challenge for the decarbonisation of industry, particularly for sectors such as refining and ammonia production, which account for a large proportion of demand and need to reduce emissions from their production processes. In this context, green hydrogen is presented as a key energy vector.
This scenario is changing and the EU is committed to developing renewable hydrogen as one of its main sources of clean energy.
Renewable hydrogen has therefore emerged as one of the main solutions for the decarbonisation of industrial sectors that are difficult to electrify, such as steel, cement and chemical production, as well as heavy transport.
The European Union is seeking to strengthen its energy security by diversifying supplies and promoting renewable energies such as green hydrogen
In addition, the entry into force of the Hydrogen and Decarbonised Gas Package, published in the Official Journal of the European Union on 15 July 2024, consists of a Directive and a Regulation establishing a regulatory framework including infrastructure, integrated network planning and a ten-year development plan.
In 2025, the European Commission continues to take significant steps in its regulationto accelerate the development of green hydrogen, integrating it into a broader framework of competitiveness, decarbonisation and energy security. See below.
One of the key regulatory milestones at the beginning of this year is the Clean Industrial Deal, a plan that aims to combine competitiveness with decarbonisation. To achieve this, the Commission has chosen clean technologies, including green hydrogen, as a central pillar for the decarbonisation of sectors that are difficult to electrify.
Among the measures announced, the European Commission has set for this year the third auction of the European Hydrogen Bank, with a maximum budget of 1 billion euros.
In addition, in the second quarter of the year it will launch the “Hydrogen Mechanism under the European Hydrogen Bank”, a platform to connect producers and consumers.
To ensure the supply of key materials and technologies for the hydrogen economy, the Commission has launched the Clean Trade and Investment Partnerships for the first quarter of 2025. These agreements aim to diversify access to essential raw materials, electrolysers and storage technologies through trade partnerships with third countries.
They also facilitate the import of renewable hydrogen from regions with abundant solar and wind resources, thereby strengthening the EU’s energy security.
The cost of renewable electricity is a critical factor in the viability of green hydrogen. In this context, the EU has launched the Affordable Energy Action Plan, a strategy to reduce the energy prices and improve access to low-cost renewable energy sources. This initiative will have a direct impact on the competitiveness of hydrogen, making its production more affordable and accelerating its uptake in different sectors.
This plan sets out eight specific short-term measures to achieve a true Energy Union that promotes competitiveness, affordability, security and sustainability.
The implementation of this Action Plan will require the involvement of all stakeholders: EU coordination with strong support from the European Parliament and the Council; strong cooperation from Member States; active involvement of stakeholders, namely industry and business, workers and society at large; and involvement at the highest political level through an Energy Union Task Force.
The EU has presented a framework that will facilitate the raising of capital for strategic projects, including hydrogen
Financing remains a challenge for the large-scale deployment of hydrogen. To address this, the EU has launched a public consultation on the creation of a Savings and Investment Union, a framework that will facilitate the raising of capital for strategic projects, including hydrogen.
This initiative aims to channel private and public investment into key infrastructure, reduce dependence on subsidies and ensure a sustainable business model for the sector.
One of the main challenges to the development of hydrogen in Europe has been the red tape involved in building infrastructure. To speed up these processes, the Commission will launch the Industrial Decarbonisation Accelerator Act at the end of 2025, which will introduce faster permitting procedures for strategic decarbonisation projects.
This measure is key to the deployment of all types of hydrogen projects, including production plants, transport and storage networks, facilitating the integration of this technology into the European energy system.
REPowerEU, the European Union’s strategic plan to reduce dependence on imported fossil fuels, will continue. Launched by the European Commission in 2022, it aims to strengthen the continent’s energy security by diversifying supplies and promoting renewable energy. In this sense, the plan has supported the framework for renewable hydrogen in Europe.
By 2030, Europe is expected to produce 10 million tonnes of renewable hydrogenand import a further 10 million tonnes. By 2050, renewable hydrogen is expected to meet around 10% of the EU’s energy needs.
Similarly, the EU’s Renewable Energy Directive (RED III), which is part of the Fit for 55 package, aims to significantly boost the use of renewable hydrogen in several key sectors such as industry, transport and aviation. In practical terms, it requires Member States to adapt their national legislation to meet these targets by 21 May 2025.
The industrial sector will be the main beneficiary of renewable hydrogen, as an estimated 61% of hydrogen projects in major European countries will be for industrial applications, according to the analysis by the firm Westwood Global Energy Group.
The EU is supporting the development of new hydrogen infrastructure to create a clean energy interconnection between Member States
RED III will also introduce a single system of guarantees of origin, allowing consumers and businesses to accurately verify the provenance of the hydrogen they buy and ensure it meets EU environmental standards.
Given the foregoing, 2025 will be a key year in the evolution of the European energy sector, with significant regulatory advances that will support the mass adoption of renewable hydrogen. Europe will be closer to achieving its decarbonisation and energy transition goals. These advances will create a more efficient, transparent and sustainable market that will make a fundamental contribution to the fight against climate change.
