Nel warns Europe could cede the hydrogen lead without Made-in-Europe sourcing rules

Volldal sounds the alarm on China

Nel’s chief executive, Håkon Volldal, told Reuters on February 10 that European firms risk losing out on major projects as China ramps up its own capacity. “We currently hold the technological lead, but if we don’t deploy and learn from this technology, the Chinese will catch up—and pass us,” Volldal warned.

Against this backdrop, Nel is calling for procurement policies that give European manufacturers priority on public contracts. The scale of the potential opportunity is substantial: EU institutions spend roughly €2.5 trillion each year on goods and services.

Key facts cited by Nel include:
- China controls 60% of the world’s electrolyser capacity
- European companies still dominate the domestic market with more than 80% market share since 2022
- More than 90% of hydrogen used in Europe is produced from fossil fuels

Broad backing for protective measures

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Nel isn’t alone in advocating protectionist-style measures. Kim Hedegaard, CEO of Power-to-X at Topsoe, pointed to the solar industry as a cautionary example, while Nicolas de Coignac of John Cockerill Hydrogen stressed that China is building a leg-up through sheer project scale.

EU policy momentum is building, with the Commission planning policy proposals this month. Brussels also tightened access to the EU’s principal hydrogen subsidy fund in 2024, excluding many beneficiaries who had planned to use cheaper foreign equipment.

Market headwinds weigh on the sector

The hydrogen supply chain has faced a difficult year. In 2025, numerous projects were canceled or postponed as Europe wrestled with high energy costs and competition from cheaper fossil hydrogen, slowing expansion across the continent.

Nel’s upcoming earnings release

Nel is slated to report fourth-quarter 2025 results on February 26. In December, the company decided to move forward with industrializing its Next-Generation Alkaline Platform at the Herøya site. The European Union backs the project with up to €135 million from the Innovation Fund. The company expects the commercial launch in the first half of 2026.