EU Launches Hydrogen Mechanism to Boost Energy Security, Market Development

The global hydrogen sector is undergoing significant developments aimed at accelerating clean energy transitions, with a strong focus on regulatory frameworks, market mechanisms, and international trade. The European Commission has introduced a new greenhouse gas emission methodology for low-carbon hydrogen, complementing existing regulations and providing clarity to boost investment and production across Europe, supporting sectors where electrification is challenging. Meanwhile, the Middle East, benefiting from abundant solar resources, is emerging as a key player in clean hydrogen and green ammonia production, aiming to capitalize on falling production costs and become a global clean fuel exporter. A report from the International Renewable Energy Agency highlights that by 2050, up to 20% of global hydrogen demand could be met through international trade, primarily via hydrogen derivatives like ammonia, with major export potential in sunbelt regions including the Middle East, Latin America, and Africa. To support market development, the European Commission has also launched the Hydrogen Mechanism under its Energy and Raw Materials Platform to facilitate demand-supply matching and infrastructure development, underscoring hydrogen's role in Europe's energy security and decarbonization goals. Additionally, Spain has set ambitious national targets to increase the share of green hydrogen and its derivatives in transport fuels to 2.5% by 2030, reflecting broader European commitments to clean hydrogen adoption.