Hydrogen needs water. Europe needs a plan

Needs Water. A three-part Baringa series exploring water as a critical enabler across the energy and digital transition. 

The case for water-conscious hydrogen 

Europe’s ambition to become a global leader in clean hydrogen is accelerating, with electrolysis set to play a central role in decarbonising hard-to-abate sectors. Yet, one essential input, water, has received far less attention than electricity, land, and infrastructure. 

Producing green hydrogen is inherently water-intensive. It requires not just high volumes of water, but also with adequate quality, ultrapure for electrolysis and, in many cases, additional volumes for cooling purposes. These water demands can become significant with the technology is implemented at scale, particularly in regions already facing pressure on water systems. 

In this paper, we examine how water availability intersects with Europe’s hydrogen ambition and outline how smart planning can prevent water to become a bottleneck to its successful implementation. Drawing on our combined spatial models — which uniquely integrate hydrogen market development scenarios, technology choices, and regional water availability and demands — Baringa and FutureWater provide evidence on where risks are most acute and how they can be addressed. 

Our analysis reveals: 

• Hydrogen production could consume 5–12% of available freshwater in high-risk geographies by 2050. 
• Many hydrogen development zones overlap with already water-stressed river basins and aquifers. 
• Cooling system design and water source strategy can reduce water impact by more than 80% — if planned from the start. 
• Practical alternatives such as treated effluent reuse, desalination, and hybrid water systems are viable but require to be planned from the outset early integration. 

We present four strategic questions that must be addressed to ensure Europe’s hydrogen ambition is compatible with long-term water resilience. These range from siting and permitting, to innovation, governance, and financing. 

Our message is clear: water must be treated as a strategic resource, just like access to power and land availability. By embedding water considerations into the planning and deployment of hydrogen infrastructure, Europe can deliver a hydrogen economy that is both decarbonised and resilient. 

The challenge: green hydrogen depends on water, and not all water is equal 

Electrolysis, the key process for producing green hydrogen, requires large volumes of high-quality water. For every kilogram of hydrogen produced, around 10-15 litres of ultrapure water are needed. At scale, the figures are significant: a 200 MW electrolyser operating continuously could consume over 800,000 m3 of water per year — roughly equivalent to the annual water supply for 6,000 households. 

But it’s not just the volume of water that matters: 

• Purity is essential: Most electrolysers require deionised or ultrapure water. Whether the feedstock is municipal supply, groundwater, or seawater, it must undergo significant treatment. 
• Cooling demand adds up: Especially in warm climates and large installations, cooling can account for a significant proportion of water usage — particularly in open-loop systems. 

Water can be a hidden constraint in hydrogen scale-up. It influences where projects can go, how they are designed, and how they impact other water users. 

Regions targeted for hydrogen growth due to their renewable energy potential (e.g. solar and wind) and availability of land, often face water stress: 

• Southern Europe (Spain, Italy, Greece) is already facing high baseline water stress, expected to worsen with climate change. 
• North Africa, an emerging hydrogen export hub, is among the most water-scarce regions globally, often reliant on non-renewable groundwater or desalination. 

We overlayed Baringa’s hydrogen market scenarios with geospatial datasets from the World Resources Institute and national water resource planning to forecast where these pressures will intersect. This analysis reveals in some regions a striking mismatch between water availability and hydrogen growth potential. 

Spatial overlay of current and planned hydrogen project locations, with (1 – upper figure) water stress level and (2 – lower figure) seasonal variability of water resources availability   

Many of Europe’s hydrogen growth zones overlap with regions of water stress: an indicator calculated based on local water resources availability and demand. Also, the seasonal variability of the water resources is relevant, specifically for hydrogen as it requires a reliable supply along the year. As can be seen from Figure 1, there is often a misalignment between renewable energy potential and water availability. The sunniest and windiest regions are often considered of high potential for green hydrogen. But warmer climates are also favourable for agriculture, so often these regions coincide with high agricultural water demands, with already nowadays a tights water balance, which may become even tougher in a warmer future climate. 

Without proper planning these risks can lead to: 

• Increasing competition with agriculture and communities 
• Driving up water-related costs and delays of hydrogen projects 
• Weakening local support or permitting prospects 

Early engagement with these risks offers a strategic opportunity. By embedding water into site selection and technology design, developers can reduce exposure to future constraints and make more compelling environmental cases to regulators and communities. 

Our approach: mapping hydrogen demand against water risk 

Baringa and FutureWater developed an integrated approach building on our wide range of energy system models and assessment tools that quantifies water risks associated with hydrogen production across Europe and its key trade corridors. Our approach can integrate: 

• Projected hydrogen demand by sector and geography 
• Electrolyser roll-out scenarios to 2030 and 2050, aligned to policy and market drivers 
• Assessment of technology parameters, including differences in PEM, alkaline, and SOEC systems 
• Cooling system types (e.g. open-loop, dry, hybrid) 
• Freshwater availability and stress indices adjusted for climate scenarios 

This produced a basin-level view of where water demand for hydrogen could exceed sustainable thresholds, helping decision-makers identify early risks and design mitigation strategies. 

What we found: 

• In Spain and Italy, hydrogen production could consume >5% of renewable freshwater by 2050. 
• In Morocco and Egypt, key potential suppliers to the EU, the figure rises to 10-12%, unless desalination is used. 
• Switching from open-loop to dry cooling systems reduces water demand by up to 80%. 
• Northern and Western European hydrogen clusters offer opportunities to reuse industrial wastewater or integrate with municipal treatment infrastructure. 

Our methodology enables sensitivity testing for variables like drought periods, cooling system efficiency, and urban reuse infrastructure — helping clients understand the resilience of their plans under different conditions. 

The result is a strategic planning framework that helps: 

• De-risk investment decisions by avoiding high-conflict water zones 
• Support permitting processes with robust water impact evidence 
• Unlock co-benefits by aligning hydrogen growth with water reuse and circular economy goals 

Put simply, we don’t just model hydrogen potential. We model hydrogen that works - within the constraints of real-world water systems. 

While most capacity is still at pre-operational stage, a notable share of future projects is planned away from coastal regions, many of which face moderate to high water stress. In fact, around 8% of planned hydrogen projects are in regions estimated to have high water stress, highlighting the need for water-aware planning and permitting.  

Strategic questions for a water-smart hydrogen economy 

As hydrogen projects expand across Europe and neighbouring regions, they bring with them significant water implications. Addressing these early, rather than as an afterthought, will be crucial to securing resilience, public support, and delivery success. Four strategic questions must be tackled to align hydrogen deployment with water availability and social acceptance. 

1. How should hydrogen projects coexist with other water users? 

Large-scale electrolysis can place pressure on already stressed water systems, particularly in regions where agriculture, ecosystems, and communities are competing for supply. Without safeguards, hydrogen risks crowding out both existing users and other emerging water intensive developments. 

Policymakers must define allocation principles for water use under stress and embed these into permitting. Basin-level planning and transparency are essential to avoid social conflict. 

Policy recommendation: Introduce hydrogen-specific licensing thresholds in high-stress regions, informed by transparent multi-sector water resources assessments and scenario studies. 

We help clients asses water risk at site, city and basin-level scale, enabling decision-makers to identify where hydrogen production may exceed sustainable thresholds and supports the design of multi-sector water allocation strategies, ensuring permitting and planning are grounded in robust, transparent evidence. 

2. How can we incentivise water-smart technology adoption? 

Technology choices can reduce hydrogen’s water footprint by over 80%. Selecting dry cooling systems, low-purification electrolysers, or co-locating with industrial sites for heat integration can materially reduce water demand. 

Yet these benefits are often overlooked in procurement. Water performance must be reflected in subsidies, innovation support, and scoring frameworks. 

Commercial recommendation: Include water efficiency and reuse potential in electrolyser procurement and funding design. 

We helps clients navigate these choices with integrated technology strategy and delivery modelling, ensuring water use is optimised from the start. 

3. How should water use be governed across borders? 

Europe’s hydrogen supply chains increasingly span regions with extreme water scarcity. Certification and import agreements must reflect this. Water use in producing regions like North Africa should be transparent, reported, and mitigated. 

Policy recommendation: Embed shared water sustainability standards into international hydrogen certification, with funding linked to resilience investments. 

We bring experience supporting supply chain and capital investment, helping clients futureproof projects. 

4. Can hydrogen investment strengthen water resilience? 

Hydrogen hubs offer a platform to invest in water-positive infrastructure—desalination, treatment and reuse. Done well, hydrogen can drive co-benefits for circular water solutions, supporting the energy, industry, and local communities, particularly in regions facing water scarcity. Increased water positive investment can be a game-changer in these areas, providing much-needed relief and promoting resource efficiency. 

Strategic opportunity: Position hydrogen as a driver, not just a consumer, of shared, resilient water systems. 

We support clients in identifying co-investment pathways that unlock shared value across energy and water infrastructure. Let us help you build a strategy that turns water risk into opportunity. 

What needs to happen next? 

Delivering a water-smart hydrogen economy will require concerted action from policymakers, regulators, financiers, and developers. We recommend five clear interventions: 

1. Include water metrics in certification: EU policymakers and certification bodies should amend RFNBO and hydrogen credit schemes to require reporting on water source, volume, and treatment. This will ensure water impact is tracked and managed as rigorously as carbon. 
2. Fund circular water R&D: Horizon Europe and national governments should prioritise R&D funding for low-water electrolysers, water reuse technologies, brine management, and integrated water-energy models. These technologies are crucial for long-term system viability. 
3. Align permitting with water stress: National regulators should require spatially resolved water risk screening as part of new hydrogen project approvals. This will prevent poorly sited developments and improve long-term operational resilience. 
4. Establish cross-sector governance: Basin authorities and energy/environment ministries should create hydrogen-water taskforces in high-risk regions to coordinate planning and investment. Without collaboration across sectors, water conflict is likely. 
5. Support water infrastructure co-investment: Developers and DFIs should structure financing that rewards hydrogen hubs co-located with reuse schemes, desalination, or recharge infrastructure. These synergies can lower project risk while benefiting communities. 

Taken together, these actions can shift water from a constraint to a competitive advantage for hydrogen. But timing is critical. The choices made in the next five years will shape both hydrogen’s legacy — and water’s. 

Baringa supports clients across this transition, from permitting reform, structuring delivery models, to co-investment models and investment cases. If you’re navigating these challenges, we can help. 

Final word: Europe’s hydrogen future must be water literate 

Europe’s green hydrogen ambition is a cornerstone of its decarbonisation strategy. But it must not ignore the fundamentals of water availability, equity, and resilience. With global supply chains, climate pressures, and public scrutiny mounting, the water impact of hydrogen must pay careful attention to local constraints and system interactions. 

Water is material, regional, and often overlooked. Hydrogen’s dependence on water is not theoretical: it is already shaping project viability, influencing permitting timelines, and exposing new operational risks. 

We must design a hydrogen economy that doesn’t just avoid emissions — but also avoids drying out the communities and landscapes it hopes to serve. 

Baringa and FutureWater combine deep expertise in energy systems, climate and water risk, and regulatory strategy. We’ve built geospatial models to stress test water availability under different hydrogen futures, advised on project siting and permitting, and helped clients identify water-smart investment pathways. 

This paper aims to spark a more integrated conversation. If you’re designing or delivering hydrogen infrastructure, we’re ready to partner with you to embed water resilience from the ground up. 

Let’s make water a core metric of hydrogen success — and a shared opportunity for impact. 

If you’d like to discuss, contact Bridget Teirney or Marcel Volkerts. 

This paper was written in collaboration with Johannes Hunink, Managing Director of Future Water.

FutureWater is a research and consulting firm specialising in water resource management. Their expert team combines cutting-edge modelling, satellite data analysis, and climate adaptation strategies to deliver practical, science-based solutions.