Lhyfe, a player in the production of green hydrogen in France, believes that the lack of demand is a major obstacle to the development of this energy.
Green hydrogen costs between 5 and 6 euros per kilogram to produce, far more than grey hydrogen, which costs between 3 and 5 euros.
When transported by truck, green hydrogen can cost between 10 and 20 euros per kilogram.
This difference in cost limits the interest of industries, which have to arbitrate between environmental objectives and financial constraints.
To alleviate this problem, Matthieu Guesné, CEO of Lhyfe, proposes the introduction of “remuneration supplements” for consumers, as long as market penetration does not exceed 10%.
He cites the example of the Netherlands and Great Britain, where such measures have already been introduced.
These incentive mechanisms are designed to close the price gap between green and grey hydrogen, making the former more accessible to manufacturers.
Insufficient financial support in France
In France, an initially announced 4-billion-euro aid plan to support demand for green hydrogen has yet to be deployed.
This delay contrasts with other European countries, such as Denmark, where consumer subsidies have helped establish a more dynamic market.
There, subsidies were gradually reduced once the market became self-sufficient, thanks to increased industrial demand.
The hydrogen sector in France already benefits from subsidies for electrolyser producers, as provided for in the France 2030 plan and the European PIIEC programs.
However, these measures focus on the supply side and are not sufficient to trigger industrial demand strong enough to stabilize the market.
Industries such as fertilizers, polymers, glues and steel remain cost-sensitive, and without additional support, the uptake of green hydrogen will remain limited.
Development and competitiveness in Europe
Lhyfe is currently expanding production with a plant in the Vendée region of France, and plans to increase the number of facilities, particularly in Germany.
However, Matthieu Guesné points out that the growth dynamic is more favorable in Germany and the Netherlands, where projects are advancing more rapidly than in France.
This discrepancy highlights the differences in support and incentives between European countries.
Yet the growth potential of green hydrogen is significant.
Of the 10,000 plants with the highest CO2 emissions in Europe, some 6,700 could benefit from hydrogen to reduce their emissions.
Growth in the European hydrogen market will therefore depend to a large extent on governments’ ability to support early adopters, making the market more attractive to new entrants.
Towards harmonization of European policies
The development of the hydrogen sector in Europe relies on the harmonization of support policies between the various member countries.
While some markets, such as the Netherlands and Germany, have taken the lead thanks to robust incentive policies, others, such as France, have yet to define consumer-friendly support mechanisms to boost demand.
Greater coordination between national policies and European directives could foster a more competitive single market.
