From Market Optimism to Policy Reality
Hydrogen is entering a more challenging phase of development. While early momentum was driven by expectations of rapid scale-up, reality is proving more complex. Across Europe and globally, project pipelines remain active, but final investment decisions are progressing more slowly than anticipated. The central constraint seems to lie in the difficulty of building a functioning market.
From Early Optimism to Market Reality
Initial expectations around hydrogen were shaped by strong market optimism. Declining renewable energy costs and advances in electrolyser technology were expected to improve cost-competitiveness and support uptake across sectors.
In practice, progress has been more gradual. While many countries have published hydrogen strategies and announced projects supported by public and private funding, large-scale deployment is taking longer to materialise than initially anticipated. Project pipelines remain substantial, although fewer projects are currently progressing to final investment decision, and some timelines have been adjusted.
The current phase is contributing to a more grounded understanding of what is required to move projects forward. Experience across early projects is helping to clarify cost structures, infrastructure needs and market conditions, which has shifted attention toward the development of viable business cases. In regions where stakeholders across the value chain are working together, including project developers, infrastructure providers, industrial users, and public actors, there are increasing signs that these conditions can be addressed. These efforts are helping to translate early ambition into more structured and investable opportunities.
A Demand-Led Challenge
Uncertainty around demand remains one of the main barriers to scale. Producers are reluctant to commit capital without long-term offtake agreements, while potential buyers are hesitant to enter into contracts without reliable and competitively priced supply. This creates a structural deadlock. Without demand certainty, projects struggle to secure financing. Without committed supply, demand does not materialise. As a result, many projects remain in development without progressing to bankable investment decisions.
These dynamics extend across the value chain. Infrastructure investments, including pipelines, storage and import facilities, depend on credible expectations of future utilisation. At the same time, hydrogen production is closely tied to the availability and cost of renewable energy. Hydrogen deployment is therefore increasingly understood as a market formation challenge, centered on demand creation, price alignment, and contracting structures.
The Role of Policy: Bridging the Gap
Market dynamics alone are proving insufficient to resolve these challenges. Governments are therefore taking a more active role in shaping hydrogen markets and improving project bankability.
Public intervention is focused on three key areas:
- Stimulating demand: through mandates, quotas and long-term offtake frameworks in sectors such as industry, mobility and shipping
- De-risking investment: via financial support mechanisms that bridge the gap between production costs and market willingness to pay, including operational support schemes
- Enabling infrastructure: by funding and coordinating the development of pipelines, storage and import terminals, such as the Dutch hydrogen backbone (Hynetwork Services)
In Europe, this approach is reflected in instruments such as the Renewable Energy Directive and the European Hydrogen Bank. There is growing recognition that earlier expectations, particularly around the pace of domestic scale-up, were optimistic. A revision of the EU hydrogen strategy, expected in 2026, is likely to reflect a more pragmatic and market-aligned approach.
Imports, Hubs and the Practicalities of Scale
One of the clearest shifts in European strategy is the increasing emphasis on hydrogen imports. Domestic production alone is unlikely to meet future demand, particularly in industrial regions with high energy consumption. This brings into focus the practical role of industrial clusters and port regions in enabling scale.
Ports function as logistical entry points where supply, infrastructure and demand can be connected. They enable the handling of different carriers, facilitate storage and conversion, and provide proximity to industrial users. In this sense, they are not only strategic assets, but practical enablers of market development. The International Energy Agency (IEA) highlights this role, identifying ports as critical nodes for integrating hydrogen supply chains and supporting early market formation.
Concrete projects are beginning to demonstrate how these dynamics can translate into investable opportunities. Developments such as liquid hydrogen import initiatives and LOHC-based supply chains illustrate how different technological pathways are being explored to connect international production with European demand.
Within the H2A network, partners such as EcoLog and North Atlantic are actively advancing these types of projects, including liquid hydrogen import and LOHC-based corridors. While challenges remain, these initiatives indicate that parts of the market are progressing beyond early-stage development toward more structured business cases.
Amsterdam: Enabling Market Development in Practice
The Amsterdam region is actively positioning itself within this evolving market environment. Through the H2A Association, a broad network of public and private stakeholders is working to support the development of an integrated hydrogen ecosystem, connecting imports, infrastructure, and end-use.
Within this network, partners are advancing a range of initiatives across the value chain, including the development of import corridors, storage and conversion infrastructure, and applications in industry and mobility. These projects reflect the growing maturity of the market, as concepts begin to evolve into more defined and structured business cases.
As a consortium and platform, H2A plays a coordinating role, bringing together stakeholders across the value chain to support alignment, reduce fragmentation, and help address shared challenges. This includes facilitating dialogue between project developers, infrastructure providers, industrial users and policymakers, as well as contributing to a more coherent approach to permitting, regulation, and market development.
By connecting initiatives and supporting collaboration, H2A contributes to creating the conditions under which projects can progress toward bankable outcomes. In this way, the Amsterdam region is helping to translate broader hydrogen ambitions into practical steps toward implementation.
Looking Ahead: From Pipeline to Investment
Hydrogen is entering a phase where progress will be measured less by announcements and more by projects reaching final investment decision. While challenges around cost, demand and infrastructure remain, there are increasing indications that parts of the market are beginning to move forward. A growing number of initiatives are progressing beyond early-stage development toward more structured business cases, providing important signals for investors and policymakers alike.
At this stage, the development of the market is closely linked to several factors, including policy frameworks, infrastructure availability, demand visibility, pricing structures, and risk allocation across the value chain. These elements continue to shape the conditions under which projects are assessed and advanced. For platforms such as H2A, the focus is on supporting the conditions under which this progress can continue strengthening connections between stakeholders, facilitating alignment across projects and helping to create a more coherent and investable ecosystem. If these elements come together, hydrogen can increasingly move from a strong project pipeline toward becoming a more established part of Europe’s energy system.
A Role for Collaboration: The H2A Perspective
In this evolving landscape, the ability to translate strategy into implementation will depend on effective coordination across the hydrogen value chain. The H2A Association was established to support this objective: bringing together producers, infrastructure developers, industrial off-takers, financial institutions and public stakeholders to accelerate the development of hydrogen supply chains connected to the port of Amsterdam and the wider European market. By providing a platform for dialogue, alignment and project coordination, H2A contributes to bridging the gap between ambition and execution.
As hydrogen moves from concept to infrastructure, the need for integrated ecosystems will only increase. This requires not only investment, but also alignment across projects, geographies, and stakeholders.
H2A continues to engage with partners across Europe and internationally to strengthen hydrogen corridors, support investment readiness and facilitate knowledge exchange across the value chain. Stakeholders interested in contributing to this evolving ecosystem are invited to engage with the H2A network as Europe works to build a more resilient hydrogen economy.