ITM Power's 150MW Refinery Still Awaits a Signature as Brussels Weighs New Hydrogen Rules

Two distinct storylines are converging on ITM Power this week, and investors would do well to keep them apart. One is political: chief executive Dennis Schulz has attacked a leaked draft of the EU's revised renewable energy directive, warning it could imperil Europe's electrolyser industry. The other is commercial: a 150MW green hydrogen project with a European oil refinery remains a set of agreed heads of terms rather than a signed contract.

Neither development, notably, has been tied by any report to the 10% slide in the share price on Friday, when the stock closed at €0.8880. The timing is suggestive; the causal link is not established.

A leak, not a law

Schulz's warning concerns proposals contained in a draft that has circulated in the media, not rules already adopted. That distinction matters. His critique describes the possible consequences of a future policy shift, not operational damage already suffered by ITM Power. At issue is the support hydrogen projects might receive in the European Union under RED IV, and the chief executive has made plain he views the proposed changes as a threat to the continent's electrolyser makers. For shareholders, the takeaway is that political uncertainty has moved to the foreground.

From heads of terms to hard orders

The refinery project, announced on 12 October through subsidiary Hydropulse, illustrates the gap between ambition and revenue. The plan envisages 150MW of green hydrogen capacity under a proposed ten-year agreement. Binding contracts and a final investment decision are still outstanding. Technical pre-engineering is under way, with the investment decision targeted for 2027 and production expected in 2029. Treating the headline capacity as secured business skips the part of the journey that actually counts.

That gap is the central question hanging over the hydrogen sector: how does technical planning become a commercially binding project? At ITM Power it can be tracked in real time. The project's scale describes the potential; the pending decisions describe the conditions attached to it.

The numbers that set the benchmark

Firmer ground comes from the preliminary results published on 19 October. For the fiscal year ending 30 April 2026, ITM Power booked revenue of £43.6 million and an adjusted EBITDA loss of £20.2 million. The order backlog stood at £144.0 million at the year-end.

Management has guided to revenue of £50 million to £60 million for fiscal 2027, alongside an adjusted EBITDA loss of £17 million to £20 million — meaning even the forecast holds out no prospect of positive adjusted earnings. These figures should not be conflated: backlog is not annual revenue, and guidance is not a delivered result. What matters for valuation is how the existing book of business actually converts into sales.

Cash buys time, not execution

The balance sheet provides the wherewithal for that conversion. ITM Power ended fiscal 2026 with liquid funds of £215.6 million, and expects a cash position of £170 million to £180 million by the close of fiscal 2027 — below the most recently reported year-end level. A cushion of that size is relevant context for a loss-making phase, but it answers a different question from revenue and earnings: what resources are available, not whether projects will reach binding status or hit their economic targets.

Governance housekeeping, separately filed

Alongside the policy and project news, the company disclosed routine matters. A total of 431,157 previously granted options became exercisable, held by Schulz and chief technology officer Simon Bourne, with a transaction date of Monday. ITM Power also announced the admission of 299,638 ordinary shares with a nominal value of £0.05 each, expected to become effective on or around Wednesday — an announcement that is not the same as confirmation of completion. A general meeting has been scheduled for 13 November 2026 at 10:00, and the annual report for the fiscal year ended 30 April 2026 has been made available.

The test that lies ahead

Friday's decline, on its own, offers no fresh operational insight. The decisive proving ground sits between backlog, revenue guidance and binding project decisions. ITM Power's hydrogen story should be judged not by the size of its largest announced plant but by demonstrable delivery — and that is precisely where the economic case still has to be made.