European Hydrogen Market Retrospective for 2025
Westwood entered 2025 anticipating a similar number FIDs to 2024, albeit at a larger scale, supported by clearer regulation, increased innovation, and more targeted subsidies. The year unfolded differently than expected, as delayed funding timelines, pipeline uncertainty, offtake risk, and slow RED III implementation weighed on momentum.
However, these challenges did not stall the market. Despite the absence of FIDs across five notable projects – underscoring the structural hurdles still facing Europe’s hydrogen sector – meaningful progress was achieved.
While some funding mechanisms, including the European Hydrogen Bank, fell short of initial expectations, substantial capital continued to be deployed across the region. Moreover, although RED III was initially expected to deliver regulatory certainty in 2025, the approval of the Low‑Carbon Delegated Act and the EU’s acknowledgement of ongoing RFNBO challenges reaffirm its long‑term commitment to scaling the hydrogen economy.
This retrospective examines the developments that ultimately shaped Europe’s hydrogen market over the year.
David Linden, Executive Director & Head of Energy Transition
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Jun Sasamura, Manager – Hydrogen
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Ben Clark, Senior Analyst – Energy Transition
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