From long-term storage and flexibility to hard-to-abate sectors and data centres, a thriving clean hydrogen sector will provide much-needed solutions for net-zero energy systems in the very near future. EU leaders and member states will be rewarded if they persist through the current regulatory challenges.
As renewable power generation rapidly expands across Europe, policymakers increasingly face the parallel challenges of how to store variable and intermittent energy over long periods of time, how to decarbonize industries that simply cannot connect to the grid, and how to meet the ever-growing demand for electricity in the digital economy. In each of these areas, a thriving clean hydrogen sector can play a role in supporting the realization of a sustainable, circular and energy-sovereign economy.
Storage and flexibility
One of the characteristics of renewable energy is variability. Wind and solar power generation fluctuates with weather conditions and seasons, increasing the pressure on power systems to balance supply and demand. Batteries play an important role in short-term storage, but they are not designed to provide energy security over weeks or months. This is where hydrogen becomes essential.
Clean hydrogen serves as a long-term energy storage solution by converting surplus renewable electricity into molecules that can be stored and transported at scale. During periods of excess wind and solar power generation, hydrogen is produced in electrolyzers and stored in underground caverns, pipelines, or dedicated storage facilities. When energy demand increases or renewable energy output decreases, that hydrogen can be converted back into electricity or used directly for industrial applications. This flexibility is particularly valuable for Europe as it seeks to move away from dependence on fossil fuels.
Hydrogen can reduce renewable electricity curtailments, improve grid stability and provide strategic reserves during times of energy stress. It also provides cross-border flexibility, allowing member states rich in renewable resources to export hydrogen to areas with greater industrial demand.
Decarbonization of sectors that are difficult to reduce
Hydrogen’s greatest contribution may ultimately be in areas where direct electrification is technically difficult or economically impractical. Heavy industry, shipping, aviation, chemicals, and heavy goods transportation components all require energy-dense fuels or high-temperature heat that cannot be efficiently provided by electricity alone.
Steel production is one of the most obvious examples. Currently, much of Europe’s steel industry relies on coal-based blast furnaces, making it one of the continent’s most carbon-intensive industrial sectors. Clean hydrogen provides an alternative route to coal in the direct reduction iron process, enabling near-zero emissions steelmaking while maintaining industrial competitiveness.
Similarly, hydrogen is already used as a feedstock in sectors such as fertilizers and chemicals, much of which is now produced from unabated natural gas. Replacing gray hydrogen with renewable or low-carbon alternatives can immediately reduce emissions without fundamentally redesigning industrial processes.
In shipping and aviation, hydrogen-derived fuels such as ammonia, methanol, and synthetic e-fuels could become essential for decarbonization. It is unlikely that batteries will power long-range ships and aircraft on a commercial scale in the near future. Hydrogen-based fuels are therefore one of the few viable routes to reduce emissions in these sectors while maintaining operational flexibility and global connectivity.
Driving the rise of the data center
Another emerging challenge for Europe’s energy systems is the extraordinary increase in electricity demand from data centers. The rapid expansion of artificial intelligence, cloud computing, and digital infrastructure is creating significant new electricity demands across the continent. Large data centers not only require significant amounts of power, they also require a reliable and continuous power supply.
Hydrogen can support this growing demand in several ways. Fuel cells powered by clean hydrogen provide backup power generation for critical digital infrastructure and replace the diesel generators still widely used today. Over time, hydrogen also has the potential to support off-grid and hybrid energy systems for hyperscale data centers, especially in regions with limited grid capacity.
As Europe seeks to become both a digital and climate leader, integrating clean hydrogen into data center energy strategies could help reconcile rising electricity demand with decarbonization goals. It also creates opportunities for synergies between renewable power generation, hydrogen production and digital infrastructure investments.
This intersection between hydrogen and data infrastructure is likely to become increasingly important over the next decade. As AI-driven demand accelerates, Europe will need every available clean flexibility solution to maintain grid reliability and prevent bottlenecks.
conclusion
Europe’s hydrogen sector is developing more slowly than expected due to a combination of high production costs, regulatory fragmentation and uncertainty, slow permitting and inadequate infrastructure.
But these growing pains must not obscure the long-term strategic importance of hydrogen. All major net-zero pathways still show that clean hydrogen has a key role to play in achieving true decarbonisation. EU policymakers should therefore resist the temptation to scale back ambition in response to short-term difficulties. Building a clean hydrogen economy will not happen overnight. However, if Europe maintains regulatory clarity, supports infrastructure development and continues to foster demand, hydrogen will become an essential tool in achieving a competitive, autonomous and climate-neutral energy system.
This opinion editorial was produced in collaboration with European Sustainable Energy Week (EUSEW), the largest annual event dedicated to renewable energy and efficient energy use in Europe. #EUSW2026 is in its 20th year, once again bringing together a community of people interested in building a safe and clean energy future for generations to come.
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