The European Union (EU) has set ambitious climate and energy goals, targeting net-zero emissions and energy independence by mid-century. Achieving these goals requires not only accelerating the transition to renewable energy but also addressing critical challenges around the cost of renewable electricity, critical raw materials, and hydrogen production. By implementing targeted strategies, Europe can lay a solid foundation for a more sustainable, competitive, and energy-secure future.

Here’s how Europe can tackle these challenges and pave the way for large-scale renewable energy deployment and hydrogen adoption:

1. Scaling Up Renewables for Affordable Hydrogen Production

Renewable energy is the cornerstone of Europe’s energy transition, and its large-scale deployment is critical for enabling reliable and cost-competitive hydrogen production. Hydrogen, often referred to as the “fuel of the future,” has the potential to decarbonize sectors that are hard to electrify, such as heavy industry and long-haul transport.

To achieve this, Europe must:

• Accelerate renewable energy deployment: Expand wind, solar, and other renewable energy projects at scale, reducing the cost of renewable electricity, which is a key input for green hydrogen production.
• Lay the groundwork for a 2040 climate framework: Establish clear, long-term policies that enable investment in hydrogen infrastructure and support the production of hydrogen derivatives like ammonia and e-fuels.

By focusing on large-scale production and clear policy pathways, Europe can build a competitive hydrogen market while advancing its climate goals.

2. Developing a Comprehensive EU Hydrogen Strategy

To unlock hydrogen’s full potential, Europe needs a coordinated approach to infrastructure and storage. A well-designed EU Hydrogen Grids Action Plan would ensure hydrogen is efficiently transported and stored, allowing for seamless integration with renewable energy systems.

Key priorities include:

• Dedicated energy storage strategies: Hydrogen storage solutions must be developed to balance the variability of renewable energy sources, ensuring a steady supply of hydrogen across sectors.
• A strategy for imported hydrogen: While Europe works to scale up domestic production, it must also secure partnerships for hydrogen imports, ensuring supply chain reliability in line with the Renewable Energy Directive (RED).

An integrated hydrogen strategy will not only support Europe’s energy independence but also position the EU as a global leader in hydrogen technology.

3. Building Infrastructure for Critical Raw Materials

Critical raw materials like lithium, cobalt, and rare earth elements are essential for renewable energy systems, batteries, and hydrogen production. However, Europe’s reliance on imports for these materials poses a significant challenge. To meet the targets outlined in the Critical Raw Materials Act (CRMA) and the Net-Zero Industry Act (NZIA), Europe must invest in local processing and recycling infrastructure.

Steps to address this include:

• Establishing robust recycling systems: Recycling critical materials reduces dependency on imports and minimizes environmental impact.
• Promoting processing capacity within Europe: Developing processing infrastructure ensures a stable supply of materials for clean energy technologies.

Without these measures, Europe risks falling short of its ambitious energy and climate goals.

4. Streamlining Permitting Rules for Innovation

Modernizing permitting processes is crucial to accelerate the development of advanced energy solutions, including e-fuels, materials production, and hydrogen processing sites. Existing permitting rules often create bottlenecks that slow down project deployment. Europe can address this by:

• Adopting streamlined solutions: Programs like NZIA and REPowerEU offer models for simplifying permitting processes and reducing bureaucratic delays.
• Encouraging investment in innovation: Clearer, faster permitting rules will incentivize private-sector investment in cutting-edge energy technologies.

By making these changes, Europe can accelerate the expansion of its clean energy sector, boosting competitiveness and innovation.

A Path to Affordable Hydrogen and Sustainable Energy

To reduce the cost of hydrogen and renewable electricity, Europe must act decisively across several fronts: scaling up renewables, designing a robust hydrogen strategy, developing infrastructure for critical raw materials, and modernizing permitting rules. These actions will not only advance Europe’s climate and energy goals but also strengthen its position as a global leader in clean energy innovation.

The transition to a greener future is within reach. With the right policies, investments, and infrastructure, Europe can lead the way in delivering affordable, reliable, and sustainable energy for generations to come.