INSIGHTS / News

Hydrogen’s potential to decarbonise transport has long dominated headlines, but in 2024–2025, its real-world growth is happening elsewhere. Across the UK and in Europe, hydrogen is gaining traction in sectors previously viewed as too energy-intensive or complex to decarbonise. Spanning green steel to backup power for data centres, its role is evolving from speculative to strategic.

So, where exactly is hydrogen gaining ground beyond mobility, and what should early-stage innovators and investors watch?

Heavy industry

Steelmaking, one of the world’s most carbon-intensive industries, is rapidly embracing hydrogen as a cleaner alternative to coal. In Germany, Salzgitter’s SALCOS programme broke ground in 2025 on a 100 MW electrolyser to supply hydrogen for Direct Reduced Iron (DRI) production, targeting near-zero-carbon steel by 2033. In Sweden, H2 Green Steel is building a multi-billion-euro hydrogen-powered plant, with commercial output expected in 2025.

In the chemicals sector, ammonia and methanol production are transitioning from fossil-based hydrogen to renewable hydrogen. Yara’s Herøya plant in Norway (the largest green ammonia facility in Europe) is already producing and exporting low-carbon fertiliser. With fertilisers responsible for a major share of agricultural emissions, hydrogen-enabled production could significantly reduce food system emissions.

Aviation, shipping and power

Aviation remains difficult to electrify, making hydrogen a prime candidate for future decarbonisation. UK-based ZeroAvia completed a successful flight campaign with a hydrogen-electric aircraft in 2023, while Rolls-Royce and easyJet tested a hydrogen-combustion aero engine. Though commercial service is still years away, certification pathways are forming.

Maritime adoption is also accelerating. In Norway, hydrogen-powered ferries are on order and ports are investing in hydrogen bunkering. Hydrogen derivatives like ammonia and methanol are gaining traction as marine fuels, a trend backed by shipping giants such as Maersk.

Meanwhile, hydrogen is proving useful in decarbonising power generation and providing backup power. The UK’s Stanlow refinery will soon host Europe’s first 100% hydrogen-fuelled CHP plant. Across the Channel, the HyFlexPower project in France demonstrated 100% green hydrogen combustion in an operational gas turbine, a global first. These use cases show hydrogen’s potential in balancing grids and replacing fossil-fired industrial heat.

Startups and new use cases

Startups are playing a key role in advancing hydrogen applications beyond the expected. UK-based GeoPura is providing off-grid hydrogen power units to replace diesel generators at live events and film sets. Microsoft and NorthC have piloted fuel cell systems to power data centres, positioning hydrogen as a clean, resilient energy source for digital infrastructure.

Another area of interest is high-temperature industrial heat. Pilkington and Hanson have trialled hydrogen in glass and cement furnaces, with support from UK government programmes. These trials open the door for startups developing hydrogen-compatible burners, control systems or hybrid fuel technologies.

Ammonia is also drawing attention as a hydrogen carrier and fuel. Startups are building ammonia cracking units to release hydrogen on demand, a potential solution for long-distance transport or grid storage. Others are exploring ammonia-fuelled engines and turbines for power generation or maritime applications.

Even the gas grid is part of the picture. The UK’s HyDeploy project successfully demonstrated 20% hydrogen blending into public gas networks. While blending is likely transitional, it is already creating short-term demand for valves, sensors and injection systems, areas where startups can gain early commercial traction.

Why now? What’s driving it?

This shift is enabled by a wave of supportive regulation and funding. The EU Hydrogen Bank and UK’s Net Zero Innovation Portfolio have unlocked billions in grants and subsidies for hydrogen production and use. Industrial carbon pricing, CBAM tariffs and clean product standards are also pushing manufacturers to seek low-carbon alternatives like hydrogen.

As more demonstration projects succeed, confidence is building. For startups, that creates commercial opportunity, especially in enabling technologies, niche deployments or service models that de-risk hydrogen for industrial adopters.

Key takeaways for founders and investors

• Industrial hydrogen is real. Steel, fertiliser, shipping and power are now active testbeds, not just pilots on paper.
• Follow the funding and regulation. Hydrogen projects often hinge on grants or subsidy support, but these also lower risk for startups entering the market.
• Think beyond production. Opportunities exist across the hydrogen value chain,  from storage, sensors and safety systems to delivery, burners and hybrid solutions.

For companies of all stages, staying informed about hydrogen’s evolving role in industry can help you spot high-potential niches early. Keep an eye on current and upcoming funding calls, pilot opportunities and real-world deployments via the Innovation Platform, UK Government portals and EU programmes like the Hydrogen Bank.