The Hydrogen Production Build-Out: A Thin Financed Core Under a Thick Layer of Announcements

The month's green hydrogen news came in two sizes. One set comprised modest plants with grants, named contractors and a named customer. The other comprised very large projects with ambitious tonnage and few of those things. That gap is the real story of hydrogen production this period.

Our reading is that the build-out is advancing, but not where the headlines are loudest. It advances where a public funder, an engineering contractor and a nearby offtaker (the buyer who takes the hydrogen) all show up together. This digest sorts the 32 published developments by that test: operating, financed, or merely announced.

1. The financed core: Europe's grant-backed plants

If you want to know what a bankable hydrogen project looks like today, start with Spain, Austria and Lithuania.

Onuba: the clearest announcement-to-hardware path

Moeve's Onuba H2 plant in Huelva is the month's most complete example. It comprises 15 standardised 20 MW alkaline electrolyzer modules from thyssenkrupp nucera, 300 MW in total, and is designed for roughly 45,000 tonnes of renewable hydrogen a year. ↗ The project secured final investment approval earlier this year, unlocking over €1 billion for phase 1. It carries Project of Common Interest status and about €304 million in grants. Moeve holds a 51% stake, and Abu Dhabi's Masdar is to supply renewable electricity.

Equipment orders are now flowing. Alfa Laval will deliver 60 heat exchangers for cooling the electrolysis system and gas processing units. A second report describes Onuba and the CirCular metals-recycling facility together mobilising about €1.55 billion, with Onuba using a dedicated photovoltaic array plus grid power. ↗ The sources still flag grid upgrades, water demand, brine disposal and the need for long-term offtake.

Onuba is the first phase of the Andalusian Green Hydrogen Valley. That programme aims for up to 2 GW of electrolysis and 300,000 tonnes a year, and the region has around 14 planned projects totalling nearly 2.3 GW. Phase 1 is financed. Everything after it is still aspiration.

OMV loses a partner and keeps building

OMV will proceed alone with its 140 MW electrolysis plant at Bruck an der Leitha after Masdar withdrew from the planned joint venture. ↗ The plant is designed for up to 23,000 tonnes a year, delivered through a 22-kilometre underground pipeline to the Schwechat refinery, with commissioning on track for late 2027. The funding stack explains why it survives the exit:

• A €450 million loan from the European Investment Bank, covering three-quarters of an estimated €600 million cost.
• Up to €123 million in production support from Austria Wirtschaftsservice under the European Hydrogen Bank.
• A Siemens Energy-led EPC (engineering, procurement and construction) consortium with STRABAG installing PEM electrolysers, compressors and related infrastructure.

The hydrogen is meant to replace fossil-based hydrogen at the refinery, with OMV's internal estimate of up to 150,000 tonnes of CO₂ avoided a year. The pattern worth noting is that a captive refinery customer plus development-bank debt plus a production subsidy can carry a project through a sponsor change.

Small, finished and municipal

Smaller plants are the ones actually finishing. In Vilnius, Miesto gijos has completed a €10 million, 3 MW PEM plant. It is in testing, with first hydrogen expected before year-end. ↗ It is co-funded 70% by the EU and 30% by the city, built by MT Group as EPC contractor, and initially supplies 16 municipal fuel cell buses. It uses waste heat from the adjacent CHP plant and includes the city's first public refuelling station.

In Lübeck, EBL won a €3.55 million state grant for a 1 MW PEM electrolyzer powered by a 7 MWp landfill-slope solar array. The hydrogen is meant for waste-collection vehicles and a planned refuelling station. ↗ Total cost is estimated at €7.9 million. In Corsica, Corsica Sole inaugurated Folell'Hy, a 150 kW pilot using 60 Enapter anion-exchange-membrane (AEM) electrolyzers, targeting about 20 kg a day. ↗ Its first use is fuelling a maritime high school's training vessel.

The scale is small, and these sites are better read as learning assets than as supply. But they reached completion because grants, municipal ownership and a captive fleet removed the offtake question.

Castellón: a 25 MW electrolyser in commissioning

At bp's Castellón refinery, a 25 MW electrolyser co-developed with Iberdrola is in commissioning and expected to supply 2,800 tonnes of green hydrogen a year. ↗ The Generalitat Valenciana has now granted €76 million in direct aid. Roughly €66.3 million goes to a renewable hydrogen demonstrator that would replace grey hydrogen from steam methane reforming. About €9.7 million goes to a sustainable aviation fuel (SAF) pre-treatment unit. This sits beneath bp's HyVal ambition of 2 GW by 2030, which remains an ambition. The source itself warns that without market certainty the site risks staying dependent on subsidies.

Our reading: every project that moved to construction or commissioning this month had at least two of three supports: a public grant or concessional loan, a named EPC or equipment contractor, and a captive customer. Projects with none of the three stayed in the next section.

2. Steel: the biggest demand story is also the shakiest

Steel is where hydrogen production's largest potential demand sits, and this period it delivered both progress and a warning.

Germany: large public money, one high-profile exit

Germany's steel sector is shifting plants from coal-based blast furnaces to hydrogen direct reduction (DRI) plus electric arc furnaces. In Saarland, Power4Steel involves about €4.6 billion of investment, with €2.6 billion in public support. ↗ Salzgitter's SALCOS aims to cut emissions by 60–95% through phased hydrogen use. thyssenkrupp Steel Europe's tkH2Steel in Duisburg plans a 2.5 million-ton DRI plant backed by roughly €2 billion in public funds.

The caveats came in the same report. The IEA says early hydrogen-DRI plants may cost 50–140% more than conventional facilities. Regional studies estimate up to 52.5 TWh of extra renewable electricity could be needed for full conversion. And Reuters reports that ArcelorMittal withdrew from planned German projects, returning about €1.3 billion in support because of high energy costs and uncertain hydrogen economics.

For electrolyzer vendors, this matters more than any single award. Steel demand is large, but it is the segment most exposed to the price of power and the price of hydrogen. Public money has not been enough to settle that.

Austria: the demonstrator route

voestalpine began construction of its Hy4Smelt demonstration plant in Linz. It is designed for about 3 tonnes of iron an hour, with first production expected by late 2027 under an investment of around €170 million. ↗ It builds on the on-site H2FUTURE PEM electrolyzer operated with VERBUND. Named challenges include electricity demand, hydrogen storage and compression, electrolyzer lead times and grid upgrades in Upper Austria.

Our reading: a €170 million demonstrator is a small, sensible bet, especially against the German headline numbers. It tests the technology without committing to commercial-scale hydrogen volumes.

Brazil and South Africa: steel as an export product

Brazil's pipeline points the same way. The European Commission committed €3 million through H2Uppp, implemented by GIZ, to accelerate nine new green hydrogen projects. Grants start at €50,000 and cover feasibility, environmental assessments and preliminary engineering. ↗ ABH2 maps 34 low-emission projects with potential of up to 4.6 million tonnes a year by 2035, against domestic demand of 3.7 million tonnes. Flagships include a green iron hub in Maranhão led by Vale and Green Energy Park. The project coordinator names offtake as the main obstacle to scaling. South Africa's priority list includes Saldanha direct-reduced iron, which is at pre-feasibility or development stage. ↗

A €50,000 feasibility grant and a multi-billion-dollar plant are separated by years and by one thing above all: a buyer who will sign.

3. The announcement layer: large numbers, early stage

This is where a reader needs the most discipline. Several of the month's biggest figures describe projects with no final investment decision (FID), no construction date and, in places, no disclosed water plan.

Uzbekistan, Kazakhstan, Chubut: ambition without commitments

Allied Biofuels' Khorezm complex in Uzbekistan is planned at about US$6.1 billion. It envisages up to 2.4 GW of Plug Power PEM electrolyzers, up to 4.45 GW of renewable power and about 1,600 MWh of battery storage. ↗ Sinopec Engineering is handling FEED (front-end engineering design), Topsoe is to deliver SynCOR technology and Sasol Fischer-Tropsch synthesis. The partners target an early-2027 FID, but the project is at FEED stage, no construction date is set and water-allocation plans in the Aral Sea basin are undisclosed. The binding agreement is with the regional government and sets out the project's implementation. It does not finance the plant.

In East Kazakhstan, YPP Corporation is considering a green hydrogen and ammonia complex under an exploratory memorandum. It outlines roughly $2 billion and about 1 GW of renewables, with output of up to 55,000 tonnes of hydrogen or 310,000 tonnes of ammonia a year. ↗ The source describes this as a streamlined scope compared with an earlier 2025 framework, and financing, site approvals and offtake are pending.

Chubut's roadmap links roughly 13,000 MW of wind to about 632,000 tonnes of green hydrogen a year by 2035. The source is explicit that it is a high-level policy framework, not a set of committed projects. ↗

Poland and Spain: small, but unfinished

Even modest projects can sit in the announcement layer. Sungrow Hydrogen and DOT Engineering reportedly signed a supply agreement for a 21 MW PEM electrolyzer in Lower Silesia. The project still awaits permits, financing, grid-connection approvals, RFNBO certification and offtake, and the source says it remains a planned project rather than an operating plant. ↗ (RFNBO means renewable fuel of non-biological origin, the EU's certification category for qualifying green hydrogen.)

In Soria, Spain, IDAE reportedly awarded around €44 million to Elyse EM-Numancia for a hydrogen and green methanol facility. Support is performance-based, tied to certified deliveries at an indicative €0.69 per kilogram. ↗ The project size is unclear: initial reports cite a 60 MW alkaline electrolyzer, while at least one trade publication calls it a 2.5 MW pilot. The discrepancy is unresolved in the award documentation. It has no FID and has not broken ground.

The export-corridor cases

The most interesting mix of real and aspirational sits in South Africa and Ukraine.

South Africa launched six priority projects at the African Green Hydrogen Summit. Only the lead one, the Phelan Green Group electro-SAF venture, has secured a US$100 million equity commitment and an offtake agreement. It is due to move into construction next year, with first exports anticipated in early 2029. The others are described as pre-feasibility or development stage, and one local supply project has completed FEED.

Separately, Hive Hydrogen South Africa signed a roughly $1 billion agreement with Topsoe for an 850 MW solid oxide electrolyser cell (SOEC) package and a dynamic Haber–Bosch ammonia loop. It is for the $5.8 billion Coega Green Ammonia Project, aiming at about one million tonnes of green ammonia a year. ↗ Developers expect FID around 2026 and commissioning by 2029. The two articles describe the stage of Coega's ammonia plant differently, as pre-feasibility or development in one and as a signed technology package with an FID expected in the other . Treat the supply agreement as a real signal and the FID as unproven until it is announced.

The H2EU+Store consortium plans RFNBO-compliant hydrogen from Western Ukraine, carried as blends through existing pipelines in Ukraine, Slovakia and Austria, with underground storage in depleted reservoirs. ↗ Phase 1 targets approval of approximately €500 million by 2028 and initial flows around 2029, then 60,000 tonnes a year by 2030. Offtake talks are under discussion in Bavaria and across Germany, and the sources name regulatory harmonisation and security risks as challenges.

The Swiss–Moroccan item belongs here too. The Swiss Federal Council approved a report naming Morocco a priority partner for technical cooperation, explicitly without creating new public support instruments. ↗ Synhelion signed a memorandum of understanding to study a 100,000-tonne-a-year solar thermal fuel plant in Tan-Tan. It is a study, not a financed plant.

Project	Stage this period	Evidence in the reporting
Onuba H2 (Spain, 300 MW)	Financed, equipment procurement	FID earlier this year; ~€304m grants; Alfa Laval order
OMV Bruck an der Leitha (Austria, 140 MW)	Financed, commissioning late 2027	€450m EIB loan; Hydrogen Bank support; EPC consortium
Vilnius (3 MW)	Built, in testing	Construction completed; first hydrogen before year-end
bp Castellón (25 MW)	In commissioning	Electrolyser commissioning; €76m aid for related demonstrator and pre-treatment
Coega (South Africa, 850 MW SOEC)	Supply package signed, FID pending	~$1bn Topsoe agreement; FID expected around 2026
Khorezm (Uzbekistan, up to 2.4 GW)	FEED	FID targeted early 2027; no construction date
Lower Silesia (Poland, 21 MW)	Reported supply deal, permits pending	Financing, certification, offtake unconfirmed
Chubut (Argentina)	Policy roadmap	Not a set of committed projects

4. Technology: the electrolyzer menu is widening, but bankability is not

The financed plants above rely on PEM (proton-exchange membrane) and alkaline electrolysis, the two established technologies. The month's equipment news shows a pipeline of challengers, and the claims behind them are still largely company-reported.

• SOEC: the Coega package pairs high-temperature solid oxide electrolysis with a dynamic ammonia loop built to follow variable renewable output.
• AEM: P2H2 and Repsol report more than 1,250 hours of testing at the All4Zero hub, running between 40% and 100% load at up to 30 bar and delivering 99.9% pure hydrogen. ↗ P2H2 projects a stack life above 50,000 hours, with independent validation pending, and targets a levelized cost of hydrogen near €3.86/kg. Enapter's AEM units are already running in the Corsica pilot.
• Membrane-less decoupled electrolysis: H2Pro has installed a 0.5 MW pilot in northern Israel producing about 200 kg a day. ↗ It plans Spanish demonstrations of 5 MW in Extremadura and 25 MW in Tarragona, with planned expansion to 50 MW and 150 MW respectively. The upcoming demos are meant to test capital cost, gas handling and multi-year cycling.

On the supply side, Stargate Hydrogen won €20.6 million from the EU Innovation Fund to expand its Tallinn factory. It targets 250 MW of alkaline electrodes, 150 MW of pressurised stacks and 66 MW of integrated systems a year, building on an initial 140 MW of stack capacity. ↗ The source notes commercial orders and commissioning timelines are still to be finalised, and independent verification of the ceramic catalyst's performance has not been published.

Our reading is that buyers of electrolyzers are going to see more options but fewer proof points. The bankable choice is still the technology with operating references. The new entrants are being funded by grants and pilots, not by project finance, and the gap between a 1,250-hour test and a 20-year debt tenor is wide. Balance-of-plant orders, like the Alfa Laval one, are quieter signs that real construction is happening.

5. Not everything is electrolysis

A month of hydrogen production news that was all electrolysis would be misleading. Several developments cut against the green narrative or opened other routes.

Grey hydrogen is still being built

Arkema inaugurated a roughly €10 million steam methane reforming (SMR) unit at its Jarrie site in France. It supplies hydrogen to the site's hydrogen-peroxide production, and is the first stage of an investment programme running through 2028. ↗ Arkema has not announced carbon capture, so the unit is conventional grey hydrogen, and the company positions it as a supply-security measure rather than decarbonisation.

That is a useful counterpoint. When an industrial site needs reliable hydrogen at a modest price, and electrolytic supply is neither proven nor financed locally, it builds what works. Policy ambition has to compete with that logic every time.

Natural, biomass and novel feedstocks

Québec Innovative Materials reported mud-gas readings up to 30.0% hydrogen at 413 metres in a drill hole at its Bennett Hill project in Nova Scotia. ↗ The company stresses the measurements are preliminary, no resource estimate exists and economic recoverability is uncertain. The source notes only the Bourakébougou field in Mali currently produces natural hydrogen at scale. Natural hydrogen remains a geological curiosity with a promising regulatory trend, not a supply source.

Haffner Energy and OroCarbo reserved manufacturing capacity for 12 modular biomass thermolysis units under the CORE100 programme, a deal reported at up to €30 million, planned for California, Oregon and Washington. ↗ Haffner's French plant is running at 11 kg/h, rising toward a 15 kg/h design. Reservations are not binding contracts, and the source itself says observers are waiting for offtake agreements and finance closures.

GH Power signed a multi-year offtake for up to 1,000 kg a day of hydrogen from its aluminum-water reactor platform at Hamilton, Ontario. Deliveries start intermittently on a best-efforts basis, and pricing, purity and logistics are still under negotiation. ↗ It is a first commercial contract, and a fragile one.

Ammonia and carriers: the last-mile question

Amogy and LOTTE Fine Chemical signed a non-binding MOU on ammonia-to-hydrogen and ammonia-to-power across South Korea. It envisages cracking imported green ammonia at the point of use, with joint feasibility studies as the next step. ↗ Our reading: as production projects lean toward ammonia and methanol for export (Coega, Kazakhstan, Brazil, Spain's eM Numancia), conversion at the destination becomes part of the infrastructure picture.

6. Power, certification and the supporting cast

One of the more instructive items was a power contract rather than a plant. Air Products and RWE signed a long-term PPA for up to 75 GWh a year from the Karolinapolder wind farm and the Kerkrade solar farm. ↗ The power feeds Air Products' hydrogen production facilities and a new liquid hydrogen liquefier in the Rotterdam port area, slated to be Europe's largest when operational in 2027. The PPA is structured around RED III requirements for RFNBOs, including additional renewable electricity and temporal and geographic correlation.

Our reading: certification rules now shape project design as much as electrolyzer choice does. Dedicated renewable supply, guarantees of origin and volume matching are becoming part of the financing documents, and Poland's Lower Silesia project shows how certification can remain an open item for a long time.

The ecosystem is also building capacity around the plants. RINA launched RINA Morocco for engineering, consulting and technical support in green hydrogen production. ↗ HyCentA is investing €6.6 million in a liquid hydrogen test laboratory in Enns, designed to begin operations in the first quarter of 2027. ↗ These are services and testing, not molecules, but they are what a build-out needs before it scales. Two other items sit at the edge of production: HDF Energy is moving into multi-megawatt PEM fuel cell prototype development in Blanquefort ↗, and CFE unveiled a hybrid solar, battery and hydrogen system for Mexico's isolated Mulegé grid, with cost breakdowns not disclosed. ↗

The through-line: money follows the offtaker

Three tensions run through the month.

Scale versus certainty

The projects with the largest tonnages (Chubut, Khorezm, Coega, Kazakhstan) have the least settled financing, water and offtake. The projects that reached construction or commissioning are 1 MW to 300 MW, and most sit beside a refinery, a CHP plant or a municipal fleet. The market is not short of ambition. It is short of signed buyers.

Public money is the marginal investor

Almost every funded project this month leans on grants or concessional loans: Onuba's €304 million, OMV's EIB loan and Hydrogen Bank support, Vilnius's 70% EU share, the Valencian aid for bp, the German steel programmes. Where subsidy is performance-based, as in Spain's eM Numancia award at an indicative €0.69/kg, the discipline shifts to delivery. Private capital appears mostly as equity into already-supported projects, such as the US$100 million behind Phelan.

Partners come and go; anchors stay

Masdar left OMV's project and is supplying renewable power to Onuba. ArcelorMittal withdrew from German steel plans yet is an investor in H2Pro. The reading is that strategic partners reallocate quickly, so projects anchored by a refinery, a regulated utility or a development bank prove more durable than ones anchored by a sponsor's enthusiasm.

What to watch

• FIDs in South Africa and Central Asia. Coega's expected FID around 2026 and Khorezm's early-2027 target are the next real tests of whether export-oriented projects can close.
• First hydrogen at Vilnius and commissioning at Castellón. Operating data on a 3 MW PEM plant and a 25 MW electrolyser will show how municipal and refinery integration performs.
• The German steel line-up after ArcelorMittal's withdrawal. Watch whether the remaining projects (Power4Steel, SALCOS, tkH2Steel) keep their schedules, and what Hy4Smelt shows by late 2027.
• Independent validation of challenger electrolyzers. P2H2's stack-life projection and the H2Pro Spanish demos are the evidence project financiers will wait for.
• Offtake conversions. Brazil's coordinator calls offtake the main challenge, and Haffner's reservations, Poland's open items and GH Power's pricing talks all depend on it.