Highlights

• European experts argue that green hydrogen is not technically or economically feasible for large-scale industrial applications.
• ArcelorMittal rejects green hydrogen steelmaking, signaling a potential shift in industrial decarbonization strategies.
• The EU's hydrogen mandates face significant challenges as China advances in electrification and energy efficiency.

The European dream of green hydrogen as a pillar of industrial decarbonization is facing a harsh reckoning. In a forceful op-ed for De Tijd, (opens in a new tab) energy systems expert Prof. Ronnie Belmans of KU (opens in a new tab) Leuven warns that green hydrogen is “a brake on future-oriented industry,” calling its widespread promotion a political illusion with serious economic consequences. His remarks come as ArcelorMittal, the world’s second-largest steelmaker, formally rejected green hydrogen-based steelmaking at its flagship plant in Ghent and also declined billions in EU subsidies for hydrogen projects at its German facilities.

Belmans argues in this opinion piece via that green hydrogen—produced from renewable electricity via electrolysis—is neither technically nor economically viable for direct industrial use at scale. He notes that hydrogen-based solutions for heating, transport, and especially steelmaking have consistently failed to deliver. The volume, cost, and inefficiency of green hydrogen have rendered it unworkable compared to direct electrification or transitional technologies like natural gas with carbon capture. Even in shipping and aviation, attention is shifting toward e-fuels and biofuels produced where renewable energy is cheap—rather than relying on direct hydrogen combustion.

The core issue: the hydrogen isn’t there. Despite bold EU mandates—like requiring 42% of industrial hydrogen use to be green by 2030—Belmans argues that no viable green hydrogen supply chain exists. Meanwhile, China is surging ahead, with 29% of its final energy consumption already electrified, compared to just 21% in the EU. European electricity use is stagnating while Chinese demand rises, exposing Europe’s industrial sector to further decline.

Implications for Critical Minerals

For retail investors in the rare earth and critical mineral sectors, this development raises several questions:

• Will the EU’s continued subsidy-driven hydrogen agenda distort demand signals for rare earth-based electrification technologies?
• Could political support shift toward rare earth-intensive solutions like electric arc furnaces (EAFs), heat pumps, and advanced motors?
• Is there a growing investment case for e-fuel catalysts and synthetic fuel infrastructure, which still require rare earths and specialty metals?

As steelmakers like ArcelorMittal pivot toward scrap-based EAFs and imported sponge iron, the demand for electric furnace components, rare earth permanent magnets, and high-temperature materials could rise—if European energy policy stops chasing hydrogen illusions.

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