Airbus, the European aircraft manufacturer, is reducing its investment in the hydrogen-powered jet initiative after nearly $2 billion in expenditures.
The company had announced in 2020 its goal to introduce a zero-emission, hydrogen-powered aircraft by 2035, which was seen as a potential milestone for the aviation sector.
However, some industry leaders expressed doubts regarding the timely readiness of the technology. According to sources familiar with the situation, Airbus has already invested over $1.7 billion in the project but has determined in the past year that technical challenges and the slow uptake of hydrogen in the broader economy would hinder its ability to achieve the set target.
In early February, Airbus notified its employees that the project’s budget would be reduced and its timeline postponed, according to sources. A revised schedule was not provided.
Later that month, CEO Guillaume Faury, who had previously characterized the hydrogen initiative as ‘a historic moment,’ acknowledged that the endeavor had not resulted in a commercially viable aircraft. He reportedly stated that engineers would need to return to the drawing board for a second ‘development loop.’
Airbus’s attempts to engage a dozen airlines and over 200 airports in exploring hydrogen integration raised concerns, as airline and supplier executives privately expressed skepticism about the 2035 target. At its US competitor Boeing, which has long been doubtful about hydrogen, executives raised issues regarding safety and the technology’s readiness.
The European Union (EU) has urged the aviation sector to de-carbonize under its Green Deal, which aims to achieve climate neutrality for the bloc by 2050. Airbus, which is partially owned by the French government, was mandated to allocate a portion of a €15 billion (over $16 billion) COVID-era bailout towards the development of ‘green’ aircraft.
Reports indicate that the hydrogen initiative has enabled Airbus to secure further public and private green financing. The withdrawal occurs as overall interest in hydrogen diminishes, with firms such as oil giant BP and Finnish manufacturer Neste abandoning their hydrogen project plans.
Additionally, several prominent European energy companies are reassessing their strategies due to elevated costs and challenges in moving away from fossil fuels.
