European executives are warning that the continent risks losing its emerging green hydrogen industry to China unless stronger measures are taken to protect and scale domestic manufacturing. Industry leaders say delays in investment and the absence of clear procurement rules could allow Chinese companies to dominate a sector that Europe sees as central to its long term climate and industrial strategy.
Green hydrogen is expected to play a key role in reducing emissions from energy intensive sectors such as steel chemicals and fertilisers. Despite ambitious climate targets more than ninety percent of hydrogen currently used by European industry is still produced from fossil fuels. Policymakers are relying on clean hydrogen to close this gap but progress has been uneven across the bloc.
The industry faced a difficult year in 2025 as high energy prices and weak demand led to delays and cancellations of several planned projects. At the same time hydrogen produced from fossil fuels remained cheaper in many markets making it harder for green alternatives to compete. Executives say this has slowed the development of a supply chain that needs scale to become cost effective.
Manufacturers are now urging European institutions to introduce made in Europe requirements for publicly funded hydrogen projects. They argue that public procurement could provide the demand certainty needed to expand production and reduce costs. Without this support they warn European firms could repeat the experience of the solar sector where domestic manufacturing collapsed as cheaper Chinese imports flooded the market.
China has moved rapidly to build large scale hydrogen and electrolyser projects supported by strong state backing and lower production costs. Industry leaders say access to these large projects allows Chinese firms to gain operational experience and improve technology at a faster pace. This scale advantage they argue could eventually erode Europe’s current technological lead.
The European Commission is preparing proposals that would prioritise European manufacturers in public procurement using the bloc’s vast annual spending on goods and services. Electrolysers used to produce green hydrogen are among the technologies under discussion. However the plans face resistance from some member states and companies concerned about trade rules and higher costs.
Executives from European hydrogen firms say technology leadership alone is not enough. They argue that deployment is essential to maintain an edge and that without a strong home market European companies risk falling behind. Continued investment across the value chain from manufacturing to infrastructure is seen as critical to keep innovation and jobs within Europe.
European financial institutions have identified hydrogen and wind energy as areas where the region can still avoid heavy reliance on foreign suppliers. However they caution that this advantage will only last if investment continues and policy support remains consistent. With China already hosting the majority of global electrolyser manufacturing capacity the window for Europe to secure its position is narrowing.
