Green hydrogen: From hype to reality

Analysis of the individual projects quickly revealed that most had been announced without a solid foundation: lack of financing, pending approvals, or insufficient engineering capacity. In some cases, projects were made public before a suitable location for the plant had even been found. 

This situation led to growing frustration with green hydrogen, as the announced production volumes were not translated into concrete business opportunities. A clear gap emerged between public perception and the actual reality of this market. Calculations showed that in 2023, only 15% of the announced green hydrogen projects had been implemented. In 2024, McKinsey published a global study on the proportion of projects that reached the final investment decision stage – with similar results, but significant regional differences. 

A phase of maturity 

Since mid-2024, green hydrogen and hydrogen in general have been in a more realistic development phase. After four years of intensive activity in all directions, projects are now striving not only for technical maturity, but increasingly also for economic maturity. Numerous headlines illustrate this change: Airbus announced the end of its hydrogen aircraft, McPhy Energy filed for bankruptcy, hydrogen cars are to be replaced by electric vehicles, and large-scale production projects are facing significant technical challenges in the transition to gigawatt electrolysers. 

In 2025, the hydrogen market appears to have matured in some respects. On the one hand, its use in the mobility sector is considered unrealistic in the foreseeable future. On the other hand, the establishment of a global trading market modelled on oil and gas is not yet in sight – but could become a reality after 2035. Currently, in addition to the traditional industrial use of hydrogen, the market primarily encompasses new areas of application such as the decarbonization of heavy industry (cement, steel, chemicals) and the production of synthetic fuels. Both areas are largely driven and promoted by government subsidies. 

However, the technology has not yet reached maturity: the gigawatt capacity of electrolysers originally announced for 2026 is not expected to be available until around 2030. It is currently difficult to exceed 150 MW – a limit that poses significant problems in terms of automation and reliability. These technical challenges must be resolved before hydrogen can be produced and marketed on a large scale. 

Nevertheless, numerous hydrogen projects continue to be announced, particularly in the field of green hydrogen. The EU listed more than 1,100 initiatives for 2025 – of which, however, only around 5% will be implemented. This discrepancy between announcements and realized projects continues to affect the assessment of the market by supply chain players and investors alike. 

Who is involved in hydrogen production? 

Players in the oil and gas industry have been working on decarbonizing their industry for several years. The major energy companies (“supermajors”) initially focused on an energy transition based on renewable energies but have increasingly moved away from this. The reason for this is not the lack of viability of the technologies, but their low profitability – particularly due to low current demand. 

Given their extensive expertise in dealing with liquid and gaseous energy sources, these companies see hydrogen and e-fuels as a natural next step. It is therefore hardly surprising that they are now involved in around 15% of projects. 

The second group of operators consists of national oil companies, most of which are state-owned enterprises, primarily in the Middle East and Asia. They account for around 21% of all investments, as some of these projects are of strategic importance to their countries: on the one hand, to reduce dependence on imports and, on the other, to create local added value from existing natural resources. 

The question remains: who is investing the remaining 64%? The answer is independent companies. These are numerous, often unlisted and therefore less visible. Some are established players such as ThyssenKrupp or Linde, while others were virtually unknown before the Covid pandemic, such as Lanzajet. 

The strong role played by these independent companies poses an additional challenge for pump and valve manufacturers: potential business opportunities are more difficult to identify because the operators are less well known and therefore more difficult to approach. 

Where are the projects? 

Investments are spread across the globe but vary significantly in scope and focus. One thing that stands out is that Europe is the dominant region for hydrogen projects. The focus here is on two types of projects – green hydrogen and sustainable aviation fuels (SAF) – which differ in key respects. 

While SAF projects are still relatively small, with average investment costs of around EUR 325.5 million, green H₂ projects are significantly larger, with an average volume of EUR 1.023 billion. Large green H₂ projects are usually strategic investments that are supported by governments but at the same time strive to achieve economic balance. SAF projects, on the other hand, are driven by EU requirements for the use of sustainable aviation fuels but are predominantly financed by private investment. 

As a reminder, from January 1, 2025, all flights departing from Europe must contain at least 2% SAF, with this figure set to increase annually in the future. This lays the foundation for the emergence of a long-term market – something that is not yet the case for green hydrogen. 

A different investment strategy is being pursued in the Middle East. The United Arab Emirates, Saudi Arabia, and Oman have each announced plans to meet 25% of global demand for green hydrogen in the long term. These countries currently depend on energy production for their livelihoods and clearly intend to continue doing so in the future: today it is oil and gas, tomorrow it will be green hydrogen or ammonia. 

However, investment in hydrogen is still limited at present. The use of local applications for decarbonization has not been a priority so far, and operators are waiting for gigawatt-scale electrolysers to become available and competitively priced. Once technological maturity is achieved and demand exists, large-scale projects will follow. Green ammonia will be the preferred form of transport, as hydrogen in gaseous or liquid form is either unprofitable or technically too complex for long distances. An initial indication of this development is the growing number of solar and desalination projects that have been implemented. Although they meet local demand, they also form a necessary basis to produce green hydrogen. 

Of the three countries, Oman is already investing heavily in green energy. As its natural resources are less abundant than those of its neighbours, it is focusing on new technologies at an early stage and developing pilot projects to secure a pioneering role as soon as the market is ready. 

In the US and Canada, SAF is currently the leading application for hydrogen-based growth – a trend that is primarily fuelled by EU regulations. Since North American airlines flying from Europe must also meet the SAF quota, they are forced to mix SAF with conventional jet fuel. In contrast, the production of green hydrogen for decarbonization has suffered a significant setback: Trump's recent election to the White House has led to a sharp halt here, like the situation in the wind power sector. Since most projects were heavily dependent on public funding, they have been postponed or frozen altogether. The situation is different for synthetic fuel projects, which are increasingly economically viable on their own. 

Green ammonia is also considered a strategic resource in other regions of the world. Several countries are currently developing projects to reduce their dependence on ammonia imports, which is traditionally used in fertilizer production. 

Finally, the analysis shows that Europe is the centre of the market, not only in terms of the number of project locations, but also in terms of engineering capacity. More than 40% of all global hydrogen projects are being designed here. The continent is thus taking on a technological leadership role and giving European companies looking to enter the hydrogen market—including pump and valve manufacturers—a unique competitive advantage. 

Development of project investments 

The new hydrogen market is growing rapidly and is currently limited only by technical capacities and the size of available electrolysers. The opportunities offered by hydrogen projects – provided they are carefully identified – represent a unique opportunity to diversify exposure across other industries and offset the current difficult sentiment in various sectors. 

At the beginning of the 2020s, the landscape was still much more manageable: at that time, EPC (engineering, procurement, and construction) contracts were awarded for only 86 projects. The dimensions were also different—most projects relied on electrolysers in the range of 10 to 25 MW, i.e., on the scale of pilot and demonstration plants. 

Since then, project development has been linear rather than exponential. We are seeing an evolution rather than a revolution – both in terms of the number and size of projects. For 2024, 177 green hydrogen projects have been recorded for which the EPC contract has been awarded, with an average size of between 50 and 100 MW. 

This means that in just four years, the volume of opportunities has multiplied not only in terms of the number of projects, but also in terms of their size – corresponding to an overall growth factor of 4. The forecast shows that this trend will continue at the same pace: the hydrogen market is expected to grow by around 50% annually until at least 2028. 

The role of pumps and valves in H2 

In this developing hydrogen market, numerous demonstration and pilot projects have highlighted the technical challenges involved in producing and handling hydrogen. In most cases where failures occurred, the critical issues were related to the electrolyser’s power supply and the handling of liquid hydrogen. 

The latter is particularly problematic: due to its extremely small molecular size, hydrogen is difficult to control. H₂ molecules can penetrate metal parts and conventional welds, making both flow control and storage difficult. Since the production of green hydrogen is costly and only takes place in small quantities, no project can afford leaks. There is also an often-overlooked aspect: if hydrogen enters the atmosphere, it has a negative carbon footprint because it attacks the ozone layer and is potentially more harmful than conventional CO₂ emissions. 

With a view to minimizing the carbon footprint and optimizing mass production, hydrogen projects are therefore investing specifically in high-quality facilities. However, it is not only the handling of the hydrogen itself that is relevant. Since the production of green hydrogen requires the splitting of water into oxygen and hydrogen, additional facilities for oxygen and water treatment are necessary—in some cases also for water desalination. 

These often underestimated pre- and post-treatment facilities are just as crucial to the overall process as the actual hydrogen production. This is precisely where significant opportunities arise for pump and valve manufacturers. Their use is particularly intensive and, compared to other types of projects, accounts for a larger share of the total investment costs than electrical equipment. Accordingly, the database shows that business opportunities for pumps and valves are growing faster than in almost all other product segments – except for the electrolyser itself. 

However, due to low production volumes, the valves required today are significantly smaller than those used in the oil and gas industry. The current focus is on instrument valves measuring just a few centimetres, while pipeline valves play a somewhat lesser role. Nevertheless, the forecast points to dynamic growth: from a market volume of around EUR 9.3 million in 2020 to around EUR 139.5 million in 2025. 

Successfully navigating through this transformation requires strategic foresight, technical innovation, and operational excellence from companies. Companies that invest early in e-mobility-specific competencies and align their product portfolios accordingly will benefit from long-term growth perspectives. 

The German steel industry faces the task of combining its traditional strength in precision manufacturing with the innovation requirements of e-mobility. This is achieved through intensive cooperation with automotive manufacturers, consistent sustainability orientation, and the continuous development of future-proof wire solutions for the mobility of tomorrow. 

Learn more about wire in the electro-automotive industry at the next wire & Tube, which will take place from April 13 to 17, 2026 in Düsseldorf. Current industry and product information is available on the internet portal at www.wire.de.