The Nordics and Iberia step up as Europe’s hydrogen frontrunners – Aurora Research

The Nordics and Iberia step up as Europe’s hydrogen frontrunners – Aurora Research

Despite a challenging investment landscape, the two regions stand out for delivering RFNBO-compliant hydrogen at prices offtakers are willing to pay 

OXFORD (AURORA ENERGY RESEARCH)—The Nordic countries and Iberia have been identified as Europe’s frontrunners in renewable hydrogen production, delivering projects that are both cost-competitive and compliant with strict EU standards, according to the Q2 2025 European Hydrogen Market Report (HyMaR) from Aurora Energy Research, the global power markets analytics provider. 

The report finds that Power Purchase Agreements (PPAs) are emerging as the preferred procurement strategy, with variations such as hybrid setups, single-technology agreements, oversising, and battery integration to lower production costs. Hybrid PPAs, with LCOHs ranging from 5.4 to 10.6 €/kg, are often preferred for their pricing stability and broader availability across markets. The Nordics and Iberia lead in low-cost renewable hydrogen production, thanks to their abundant, low-cost renewable electricity ideal for electrolysis. 

Emma Woodward, European Hydrogen Market Lead at Aurora Energy Research, highlights: 

The investment landscape for hydrogen remains challenging across Europe, and project developers will have to focus on finding the set ups which work to make a project commercially viable.

“However, these bright spots do exist which our analysis showing that developments across the Nordics and Iberia are most likely to be able to produce hydrogen that simultaneously meets renewable fuel of non-biological origin (RFNBO) compliance standards at a cost offtakers are willing to pay.”

Aurora’s data further shows the global pipeline of hydrogen electrolyser projects now totals 1.3 TW, up modestly from 1.2 TW six months ago. However, growth has slowed significantly, with just 6 GW of new projects added in that time, compared to 55.2 GW added in the previous six-month period. Despite this, Europe accounted for 77% of the new project announcements, underlining the continent’s ongoing commitment to hydrogen. Of the global pipeline, 114 GW are at the development stage, with 32% targeted for commissioning by the end of 2026. 

At the policy level, progress has accelerated since October 2024. The implementation of ReFuelEU and FuelEU Maritime has provided increased regulatory clarity, while member states continue to advance transposition of the RED III directive. Finland and the Netherlands are currently leading in that effort. 

Looking ahead, Aurora’s outlook has expanded to include willingness to pay for industrial process heat in addition to existing demand from refineries, ammonia, and steel sectors. In the absence of policy support mechanisms such as quotas or certificates, the floor willingness to pay for renewable hydrogen ranges from 2.4 to 5.2 €/kg. 

While the current market is largely driven by bilateral agreements, its long-term evolution remains uncertain. According to Aurora, the market could continue in this form or gradually transition into a semi-liquid or even fully liquid market structure, depending on future policy and investment developments. 

READ the latest news shaping the hydrogen market at Hydrogen Central

The Nordics and Iberia step up as Europe’s hydrogen frontrunners – Aurora Research, source

The post The Nordics and Iberia step up as Europe’s hydrogen frontrunners – Aurora Research appeared first on Hydrogen Central.