BalticSeaH2 and CETPartnership TRI6 organised a Regulation Node online session on clean hydrogen in the chemical industry on 2 June 2026. The session focused on hydrogen’s role as an industrial feedstock, the regulatory framework shaping demand, and the practical conditions needed for large-scale deployment in chemical value chains.
The event brought together perspectives from Hydrogen Europe, the European Chemical Industry Council CEFIC, Borealis, RISE Research Institutes of Sweden, CETPartnership TRI6 and BalticSeaH2. The discussion was moderated by CLIC Innovation.
Hydrogen as a feedstock in chemical value chains
Hydrogen is already used in refining, ammonia, fertilizers, methanol, petrochemicals and other industrial value chains. In the chemical industry, hydrogen is therefore a material feedstock as well as an energy-related molecule.
Replacing fossil-based hydrogen with clean hydrogen could support lower-emission production routes, circular carbon pathways and new value chains for sustainable chemical products. However, chemical value chains are complex. For many applications, the challenge is not only how to replace energy use, but how to replace or transform the molecules used in production.
The discussion highlighted that several transition pathways may be needed. Renewable hydrogen, low-carbon hydrogen, carbon capture, chemical recycling, renewable feedstocks, synthetic fuels and synthetic feedstock routes can all have roles depending on the process, location and infrastructure. The required hydrogen volumes vary significantly between pathways, making cost, availability and infrastructure decisive factors.
Regulation, demand and competitiveness
Hydrogen demand in Europe is strongly regulation-driven. EU directives, renewable energy targets and sector-specific obligations are already creating mandated demand in sectors such as transport and aviation, where penalties for non-compliance make demand signals more concrete. In industrial applications, including many chemical value chains, demand signals are less developed and harder to translate to the end-product level.
For chemical value chains, one key question is how current regulation recognises hydrogen’s role as an industrial feedstock. The session underlined the role of carbon pricing, certification, product standards, labelling and demand-side mechanisms. These instruments can help define lower-emission chemical products, make them more visible to customers and create a basis for public procurement or other demand-side tools.
A recurring theme was the gap between the cost of clean hydrogen and the ability of downstream markets to pay for products made with it. This is particularly challenging in chemical value chains that are exposed to international competition. Regulation and market mechanisms need to create demand without pushing production and investment out of Europe.
One barrier is that obligations often sit upstream or midstream in the value chain, while willingness to pay depends on downstream markets and end users. Product labelling, certification, public procurement requirements and other downstream demand mechanisms can help make lower-emission chemical products more visible and commercially viable.
For companies, predictability is essential. Industrial investments are often made with a 10 to 20 year horizon, which means that long-term rules, stable market signals, credible offtake and infrastructure development need to be visible early enough to support investment decisions.
System integration and hydrogen valleys
The session also addressed the link between hydrogen deployment and the wider energy system. Since the cost of clean hydrogen is closely linked to electricity prices, industrial hydrogen uptake depends on power markets, grid development and system flexibility.
Hydrogen can support electrification and the integration of renewables, but this requires hydrogen transport networks, electricity grids, storage and industrial demand to develop in a coordinated way. When these systems move at different speeds, bottlenecks emerge.
Speakers noted that many barriers are increasingly systemic rather than technological. Electrolysers and industrial applications exist, but scaling them requires coordinated development of production, transport, storage, electricity grids, industrial offtake, permitting and skills. Permitting delays, grid connection constraints and skills shortages can further complicate the move from pilot-scale projects to industrial-scale applications.
Hydrogen valleys can help connect these elements by bringing together industrial users, producers, infrastructure providers, regional actors and research organisations. This connects closely to BalticSeaH2’s role as a cross-border hydrogen valley and to CETPartnership TRI6’s focus on integrated industrial energy systems.
Key insights
- Clean hydrogen already has a concrete role in the chemical industry as a feedstock for several value chains.
- Regulation is shaping the market, but industrial demand signals are still less developed than in transport and fuels.
- The cost gap remains a central barrier, especially in chemical value chains exposed to international competition.
- Product-level demand mechanisms, certification, labelling and standards are needed to make lower-emission chemical products visible and commercially viable.
- Scaling clean hydrogen in the chemical industry depends on infrastructure, electricity prices, predictable regulation and coordinated value chain development.