Spain's Iberdrola, IBE, is significantly reducing its goals for green hydrogen, cutting them by nearly two-thirds due to funding delays for certain projects it has proposed.

A spokesperson confirmed to Reuters news agency on Friday that the company now anticipates producing approximately 120,000 tons of green hydrogen annually by 2030, down from its previous target of 350,000 tons.

This decision coincides with Europe's leading utility in terms of market capitalisation, launching a three-year, $45 billion investment initiative. The goal is to enhance and enlarge power grids, increase renewable energy capacity, and strengthen energy storage capabilities on both sides of the Atlantic.

IBE unveiled the strategic update last week, as the firm's Chief Financial Officer, José Sainz Armada, announced the cut.

"The only target that we are diminishing is hydrogen," he said to analysts and investors.

"Not because we don't want to do hydrogen, we would love to do more projects, but we are still waiting for the funds to come through for the projects that we have presented," he went on to add.

Green hydrogen, which is generated using renewable energy sources, is considered crucial for decarbonising Europe's economy in the future. However, due to its high cost, green hydrogen projects typically lack competitiveness without subsidies.

Furthermore, the International Energy Agency cautioned that higher production costs and limited demand are hindering the market, Reuters reports.

"We have developed a wide portfolio of projects to supply hydrogen, as long as the price guarantees their profitability," according to Chief Executive, Armando Martinez.

"Incentives may be needed to get so."

As it stands, the company operates two plants and is constructing another. Additionally, it has several projects in progress. The most significant one, situated in Andalucía, is projected to have an initial capacity of approximately 22,000 tonnes per year.

This project has been chosen to receive EU funds and is presently awaiting allocation by the Spanish government, according to the CEO.