Eni Green Hydrogen Focus on 2 Refinery Hubs, Plenitude 15 GW Target, €5.2 B IPCEI Funding, and 1 Offshore Pilot (2025-2026)

Green Hydrogen Infrastructure Risk, Eni’s Focus on 2 Industrial Hubs

Eni‘s green hydrogen strategy directly confronts the sector’s most significant market failure: a severe lag in midstream distribution and storage infrastructure, which continues to jeopardize large-scale, export-oriented projects. By prioritizing on-site production and consumption at its own industrial facilities, the company is building a de-risked, captive market that sidesteps the uncertainty and high costs of transporting hydrogen over long distances.

On-Site Consumption as a De-Risking Strategy

The company’s approach is a calculated response to a market where infrastructure is reportedly developing at half the speed of production capabilities. This creates a critical bottleneck for projects that rely on selling hydrogen to external buyers without secured transport and storage solutions. Eni‘s model of co-locating electrolysis with existing demand centers, such as its Gela and Taranto refineries, insulates its initial ventures from this systemic risk. This contrasts with the strategies of other energy majors like Exxon Mobil and Saudi Aramco, which are developing large-scale blue and green hydrogen projects intended for global export markets and are therefore more exposed to midstream infrastructure delays.

Market-Wide Project Cancellations

The profound lack of midstream infrastructure has already contributed to a growing number of project delays and cancellations across the industry. For example, BP shelved its large-scale Hy Green Teesside green hydrogen project, citing the absence of offtake certainty and supporting infrastructure as key factors. By focusing on decarbonizing its own operations first, Eni ensures it has a guaranteed offtaker for its hydrogen production, a foundational element of project bankability that has proven elusive for more speculative ventures. This internal-first approach allows Eni to build operational expertise and scale its capabilities in line with the maturation of the broader market, including logistics and third-party offtake agreements with sectors like shipping, where players like Maersk are seeking long-term fuel supplies.

Eni Leverages 2 Key Partnerships and Public Funding for Hydrogen Entry

Eni mitigates the high financial and technical risks of entering the green hydrogen market by building a triad of support: an industrial partner for project execution, an integrated renewable energy supplier for feedstock, and public funding to improve project economics. This collaborative model is essential for navigating a sector where high capital expenditures and uncertain revenue streams remain significant barriers to investment.

Enel Green Power and IPCEI Hy 2 Use Alliance

The cornerstone of Eni‘s hydrogen development in Italy is its joint venture with Enel Green Power. This partnership combines Eni’s industrial footprint and project management capabilities with Enel’s extensive experience in developing and operating renewable energy assets. The viability of their joint projects at the Gela and Taranto refineries is significantly enhanced by public funding from the EU’s Important Projects of Common European Interest (IPCEI) Hy 2 Use program. This program can allocate up to €5.2 billion to support the hydrogen value chain, directly addressing the cost gap between green and grey hydrogen and making these early industrial-scale projects financially feasible.

Plenitude’s Role as an Internal Feedstock Supplier

The vertical integration of Eni‘s renewable energy subsidiary, Plenitude, is the lynchpin of its entire green hydrogen strategy. By controlling the production of green electrons, Eni can manage the single largest cost component of green hydrogen: the Levelized Cost of Electricity (LCOE). Plenitude‘s rapid expansion, having reached 5.8 GW of installed renewable capacity in 2025 with a clear target of 15 GW by 2030, ensures a dedicated and cost-managed supply of power for its electrolyzers. This integrated model provides a competitive advantage over non-integrated project developers who are exposed to volatile wholesale electricity prices, a risk that has stalled projects by competitors like Total Energies.

Table: Eni Key Green Hydrogen Projects and Partnerships (2025-2026)

Italy-Centric Strategy, Eni’s Focus on Domestic Industrial Decarbonization

Eni‘s green hydrogen activities are geographically concentrated in Italy, a deliberate choice that leverages its existing industrial footprint to create captive demand and sidestep the immense technical and commercial challenges of developing cross-border hydrogen transport infrastructure. This domestic focus allows the company to prove its model in a controlled environment before considering broader expansion.

Focus on Gela and Taranto

The selection of the Gela and Taranto biorefineries as the sites for its first major green hydrogen projects is highly strategic. These are large industrial complexes with significant existing hydrogen demand for hydrotreating processes, which is currently met by grey hydrogen produced from fossil fuels. By developing on-site electrolyzers, Eni can directly substitute its grey hydrogen consumption, immediately reducing its own Scope 1 emissions and creating a tangible, internal business case for the investment. This approach is more grounded than that of companies like Petro China, which is building large-scale capacity but faces similar internal integration and distribution challenges within a vast domestic market.

North Sea as a Testing Ground

While its commercial focus is on Italy, Eni uses the North Sea as a crucial testing ground for advanced technologies. The Pos HYdon project, located on an active platform in the Dutch North Sea, serves as a real-world laboratory for demonstrating the feasibility of producing green hydrogen in a harsh offshore environment. The success of this 1 MW pilot, which integrated electrolysis with variable offshore wind power, provides critical technical data and operational experience. It positions Eni with validated technology that could be deployed for decarbonizing its extensive offshore assets in the future, distinguishing it from peers like Chevron which are more focused on land-based hydrogen hubs in the US.

1 MW Pilot Validates Eni’s Offshore Production Concept Amid High Costs

Eni is successfully validating its core technological approach through small-scale, strategic pilots while the broader market continues to grapple with the high production cost of green hydrogen, which remains the primary barrier to widespread commercial deployment. This allows the company to prove its concepts without committing massive capital to projects whose economics are not yet certain.

Pos HYdon: A Critical Proof-of-Concept

The successful first production of green hydrogen at the Pos HYdon offshore platform in July 2026 marks a significant milestone. Although small in scale at just 1 MW, the project’s importance lies in its technical demonstration. It proved that integrating an electrolyzer with an existing, operational gas platform and powering it with offshore wind is feasible. This ability to repurpose existing offshore infrastructure is a key component of Eni‘s strategy to manage the high initial CAPEX associated with new energy systems and provides a pathway to decarbonize its offshore oil and gas operations.

Cost Parity as a Mid-Term Hurdle

Despite technological progress, market-wide adoption is held back by unfavorable economics. Current green hydrogen production costs are estimated between $3.50 and $6.00 per kilogram, significantly higher than grey hydrogen from natural gas, which costs $1.50 to $2.50 per kilogram. While substantial policy incentives like the U.S. Inflation Reduction Act’s $3.00/kg production tax credit are helping to close this gap in certain regions, cost parity on a global scale is not widely expected until around 2030. Eni‘s strategy of focusing on internal consumption and leveraging public subsidies is a direct acknowledgment of this economic reality, allowing it to proceed with projects that would otherwise be unbankable.

SWOT Analysis, Eni’s Cautious Green Hydrogen Strategy and Market Position

Eni‘s strengths are rooted in its integrated energy model and existing industrial assets, which enable a pragmatic, de-risked entry into the green hydrogen market. However, the company faces significant external threats from market immaturity and unfavorable economics, making its cautious, hub-focused approach a necessary adaptation to current industry conditions.

Eni’s Strategic Positioning for 2025

The analysis shows that Eni is effectively leveraging its legacy assets to build a foundation in a volatile new market. The primary challenge will be to transition from internally focused, subsidized projects to commercially competitive operations as the market matures. This involves navigating persistent cost challenges and the slow development of essential infrastructure, factors that are outside its direct control but central to the long-term success of its hydrogen ambitions.

Table: SWOT Analysis for Eni’s Green Hydrogen Strategy (2025)

Eni’s Next Move: Scaling Refinery Projects and Securing Offtake

The next critical signal for Eni will be the progression of its refinery-based electrolyzer projects from planning stages to a final investment decision (FID), a move that would mark its transition from pilot-scale validation to initial commercial deployment. Success will depend on solidifying the business case for these larger investments, which remains challenging in the current cost environment.

From Pilot to Commercial Scale

If Eni formally sanctions the Gela and Taranto projects, watch for a subsequent wave of announcements related to the hydrogen supply chain. These would include major procurement contracts for electrolyzers and balance-of-plant equipment, as well as engineering and construction partners. This could be happening as Eni formalizes internal offtake agreements between its refining and energy production divisions, creating the commercial certainty needed to commit hundreds of millions of euros in capital and demonstrating a tangible execution of its carbon neutrality goals.

Expanding the Partnership Ecosystem

If Eni announces new joint ventures or partnerships in the hydrogen space, watch for the profile of these new allies. A move to partner with logistics companies, port authorities like COSCO SHIPPING Lines, or heavy-duty transport operators like Ocean Network Express would signal an ambition to expand beyond its own industrial fenceline. This could be happening if electrolyzer cost-reduction curves accelerate faster than expected or if EU regulations (like an expanded Emissions Trading System) create a stronger financial incentive for external sectors to adopt green hydrogen, opening up new, bankable offtake markets for Eni to supply.

The questions your competitors are already asking

This report covers one angle of Eni’s green hydrogen strategy. The questions that matter most depend on your work.

• Eni hydrogen refinery project investment decision
• Hydrogen pipeline and storage projects Europe
• Green hydrogen cost parity timeline
• Other major energy companies cancelling hydrogen projects

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