Electrolyser Manufacturing Draws Large Orders From EU RED III Hydrogen Quotas

European RED III hydrogen quotas are turning refineries and e-fuel producers into large electrolyser buyers. Between October and November 2026, electrolyser makers ITM Power (ITMPF) and Plug Power (PLUG), along with separator supplier Agfa-Gevaert (AFGVF), said in a capital market update and earnings calls that as EU member states write green-hydrogen quotas into national law, large refinery and e-fuel electrolyser projects are moving toward final investment decisions and supply contracts.

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How RED III quotas make refineries electrolyser buyers

An electrolyser uses electricity to split water into hydrogen and oxygen; hydrogen made this way with wind or solar power is usually called green hydrogen. Refining and fertilizer production already use large amounts of hydrogen, mostly so-called gray hydrogen made from fossil fuels [1]. The EU's revised Renewable Energy Directive (RED III) sets targets for industrial hydrogen use, and ITM noted that these include 42% of industrial hydrogen coming from renewable-power hydrogen by 2030 [2]. The directive only binds once each member state writes it into national law. Plug said legislation in Spain and France is creating binding demand [3], and estimated that Spain's draft RED III framework could drive about 10 gigawatts of electrolyser demand by 2030 [4]. With a legal share and a deadline, a refinery stops being an optional pilot customer and becomes a buyer that has to have capacity built on time.

That change in buyer also changes project size and how suppliers are chosen. ITM said that over the past few years a large part of its sales pipeline was mobility-related projects of typically 2 MW to 10 MW, and that the trend is now clearly toward larger applications, where far fewer electrolyser companies can credibly deliver [2]. Plug said commissioned plants are a powerful reference point for new orders: its completed 25 MW first phase at a refinery in Spain positions it well for later phases at the same site [3].

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Contracts and investment decisions arrive before revenue

Each of the three companies described concrete steps from policy to orders. ITM said refineries are the biggest source of demand today and that refinery-related applications dominate its sales pipeline [2]; its Hydropulse business signed Heads of Terms with a European oil refinery for a 150 MW green hydrogen project [5]. In the third quarter Plug signed a 280 MW supply agreement with Arcadia eFuels for the Endor e-fuel project in Denmark, and secured strategic cooperation on four more Arcadia projects with more than 1 GW of combined potential [3].

Component suppliers are lining up on the same schedule. Agfa-Gevaert makes Zirfon separators, the membranes that keep hydrogen and oxygen apart inside alkaline electrolysers. Its CEO said customers already held enough membrane inventory for 2026, making this a near-blank year for the green hydrogen business, but that the company knows which projects will reach a final investment decision during 2026 and that those projects are roughly its 2027 sales; the business is starting back after the European regulatory framework was clarified [6].

These steps have not yet become revenue. Plug's electrolyser revenue fell by about $40 million year over year in the third quarter; it recognizes revenue on a percentage-of-completion basis and expects significant revenue only from late 2026 through 2027 [3]. ITM's backlog was flat at GBP 144 million [2], and Agfa expects its green hydrogen business in 2027 to recover but remain below the 2025 level [6].

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Vendors with reference plants gain, but not every project is getting bigger

If large projects keep coming, more of the choice may fall to the few equipment makers that already run comparable plants: buyers facing legal deadlines lean toward suppliers that have built similar projects, and component orders arrive about a year after the stack makers book theirs. This view has clear counterexamples. Nel (NLLSF) said third-quarter order intake rose about 340% year over year to NOK 253 million, but almost all of it was proton exchange membrane (PEM) electrolysers, with first phases mostly in the 10 MW to 50 MW range, while its alkaline electrolyser revenue fell 91% [7]. HydrogenPro (HYPRF) said in the second quarter that few projects had reached an investment decision and that some were delayed [1]. Things to track next: whether ITM's backlog rises above GBP 144 million, when Plug's Arcadia projects reach an investment decision, and whether Agfa's separator sales recover in 2027.

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Companies exposed to this change

• Nel (NLLSF): It sells both PEM and alkaline electrolysers to the same quota-bound European buyers. Most of what it wins now are first phases of staged projects, and whether later phases grow depends on quotas producing more investment decisions.
• HydrogenPro (HYPRF): It focuses on large alkaline electrolysers aimed at refinery, ammonia and e-fuel producers [1]. Its NOK 262 million backlog and pending supplier selections become real orders only if quota-driven investment decisions arrive.

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Sources

[1] Drillr · HydrogenPro (HYPRF) · 2026-08-21 · Earnings call

[2] Drillr · ITM Power (ITMPF) · 2026-10-19 · Capital market update

Refinery applications, whether directly or indirectly, dominate our sales pipeline today.

[3] Drillr · Plug Power (PLUG) · 2026-11-09 · Earnings call

[4] Drillr · Plug Power (PLUG) · 2026-08-10 · Earnings call

[5] Hydrocarbon Processing · Hydropulse signs Heads of Terms for 150 MW green hydrogen project at European oil refinery · 2026-10-13 · News · https://www.hydrocarbonprocessing.com/news/2026/10/hydropulse-signs-heads-of-terms-for-150-mw-green-hydrogen-project-at-european-oil-refinery/

[6] Drillr · Agfa-Gevaert (AFGVF) · 2026-11-10 · Earnings call

[7] Drillr · Nel (NLLSF) · 2026-10-15 · Earnings call

This article only helps you spot industry changes and companies that may be overlooked. It is not a stock recommendation.