Copenhagen Infrastructure Partners (CIP) has taken a 70% stake in the first phase of H2APEX Group SCA’s Lubmin hydrogen project in north-eastern Germany — a compact but strategically important bet in Europe’s fast-maturing green-hydrogen market. The deal, announced in early August 2025, pairs CIP’s deep project-finance muscle with H2APEX’s local development position and the project’s EU backing under the IPCEI (Important Projects of Common European Interest) programme.
Below Haush unpacks what this transaction means for the Lubmin project itself, CIP’s strategy, and the broader market dynamics and risks that will determine whether projects like this can scale successfully.
The basics (and why they matter?)
The first phase of Lubmin is a 100 MW electrolyser capable of producing up to around 10,000 tonnes of green hydrogen per year; the site is designed to be scaleable, the owner and investor envisage eventually expanding capacity to more than 1 GW. Offtake for the first phase has been “preliminarily” secured and the project has been earmarked to receive EUR 167 million of IPCEI funding from the EU, a major de-risking factor when it comes to attracting private capital. CIP will initially provide around €15m of project pre-finance through to final investment decision (FID), with construction pencilled in to start in 2026 and commissioning targeted around 2028.
Those facts are important because they place Lubmin in a distinct bucket of projects: relatively modest first-phase size (100 MW) but with gigawatt ambition, early public support via IPCEI, and an experienced private investor on board to shepherd the project through the riskiest pre-FID phase.
CIP’s playbook: from wind and solar to power-to-X
CIP is not new to hydrogen or to large-scale energy infrastructure. Its Energy Transition Fund (CI ETF I) has been explicitly targeting electrolyser and power-to-X projects and already lists several multi-hundred-megawatt initiatives in its portfolio. CIP’s approach is to combine capital with project-development capability and to commit early so projects can reach FID and secure full financing packages. The Lubmin stake fits that pattern: it is a relatively low-cost way for CIP to secure optionality on a site that has grid and water access and is positioned to exploit northern German renewables and prospective pipeline connections.
For H2APEX, the deal achieves two immediate objectives: it secures a seasoned investor to move the project through development risk and demonstrates market appetite, which is useful when negotiating offtake and EPC/supply contracts.
Market context: why Lubmin is strategically located
Germany’s updated national hydrogen strategy, coupled with EU IPCEI schemes, is explicitly geared towards creating a hydrogen production and transmission backbone in which northern production (often powered by offshore wind) is linked by pipeline to industrial demand in the south. The IPCEI mechanism has been mobilised to accelerate exactly this type of project, and Lubmin’s connection prospects (including links into the Flow pipeline network) make it an attractive node in that emerging topology. Public funding and regional government support are therefore not just subsidies; they are mechanisms to reduce the infrastructure and offtake risk that have held back many projects.
Competitive positioning and the ecosystem
Lubmin will compete for offtake and supply-chain capacity with a growing roster of projects and corporate players across Germany and northwest Europe, utilities (RWE, Uniper), global energy companies (Shell, bp), and other specialised developers. Many of those players are already moving from pilot plants to large-scale electrolysers; some have secured large grant packages and pipeline capacity. CIP’s advantage lies in its fundraising scale, fund mandate (dedicated clean-hydrogen allocation) and a track record of executing complex infrastructure projects globally, which helps when bundling grid connections, PPAs and offtake agreements at scale.
However, competition is not just about capital. It is also about proximity to renewable generation, grid access, pipeline connectivity, and credible offtake (industrial partners willing to buy green hydrogen at sustainable prices). Lubmin’s maritime northern location and existing industrial infrastructure give it a competitive edge for certain demand clusters, shipping, chemicals, and heavy industry on the Baltic corridor, but it will still need to fight in the marketplace for long-term offtake and favourable transport tariffs.
Key risks and bottlenecks to watch
- Electrolyser supply and manufacturing – the global electrolyser market is scaling fast, but capacity constraints, long lead times and import competition (notably Chinese suppliers) remain material issues for 2026–2028 deliveries. This can push up CAPEX or lead times if contracts aren’t secured early.
- Permitting, grid and water, many projects still face long permitting processes, grid congestion and the technical challenge of integrating large electrolysers into local systems. Lubmin’s pre-existing connections should help, but these are common failure points.
- Offtake pricing and merchant exposure — preliminary offtakes are welcome, but final commercial contracts and price certainty matter: green hydrogen remains costlier than fossil alternatives without continued policy support or premium offtake structures.
- Policy and funding volatility — IPCEI funding is a major signal, but national budget decisions and the sequencing of public support (Germany’s budgeting choices and programme rollouts) will influence how smoothly projects convert allocations into cash at FID. The German market continues to rely heavily on public support to reach commercial parity.
What the IPCEI funding means (and why EUR 167m matters?)
The project’s allocation of EUR 167m under IPCEI is more than headline cash: it is a validation that Lubmin is considered strategically important across the hydrogen value chain. IPCEI support lowers financing costs, makes lenders and EPCs more comfortable, and helps projects attract industrial partners. However, IPCEI money often comes with milestones, audits and rules about technology sourcing — and the big challenge for policymakers is to ensure funds accelerate domestic industrial capacity (electrolyser manufacturing, stack supply) rather than simply reducing investor risk while imports do the heavy lifting.
Bottom line: why this deal matters to the hydrogen transition
CIP’s 70% stake at Lubmin is emblematic of the next phase of Europe’s hydrogen market: from pilots and announcements to pragmatic, staged build-outs that combine public de-risking tools (IPCEI) with large private funds capable of taking projects through development to commissioning. If Lubmin reaches FID and construction on schedule (2026–2028 are the current milestones cited), it will provide a useful case study in how to bundle finance, public support and local infrastructure to create a replicable hydrogen hub.
Yet the hurdles remain non-trivial, supply-chain bottlenecks, the need for firm offtake at bankable prices, regulatory complexity and the broader race to secure domestic manufacturing capacity. For investors and policymakers alike, success will be judged not merely by trophy investments, but by how many projects convert from paper to production on time and at cost, and whether Europe builds an industrial ecosystem, not just a pipeline of projects.
The post CIP’s move into Lubmin: what the deal tells us about Europe’s hydrogen race first appeared on Haush.