Implementation of the Federal Government's Hydrogen Strategy

Ensuring a secure provisioning of hydrogen depends on having enough supply. This is to be provided by domestic production and at least half through imports. However, neither domestic production nor the planned imports are feasible by 2030.

It is foreseeable that the necessary demand from the energy and industrial sectors will be lacking: for example, a key driver of demand is missing due to the lack of clear provisions for hydrogen-ready gas-fired power plants. Planned applications in the industry are being cancelled or delayed. At the same time, despite the foreseeable low utilisation, two-thirds of the hydrogen core network is to be ready as early as 2030.

The Federal Government is still far from reaching its goal of establishing a hydrogen economy by 2030.

Green hydrogen is likely to remain significantly more expensive than fossil fuels – and thus uncompetitive. This means that private investment is not being made. To compensate for the price differences, the Federal Government would have to provide billions in subsidies each year. Permanent government support is hence foreseeable – with considerable consequences for the stability of federal finances.

The financing mechanism chosen for the development of the hydrogen core network entails considerable financial risks for the Federal Government. If the ramp-up of the hydrogen economy is not successful, this could place an additional burden of tens of billions of euros on the federal budget.

In general, green hydrogen has the potential to be produced and used in a climate-neutral way. However, imports in particular can cause significant greenhouse gas emissions. In addition, the Federal Government had to make concessions on sustainability requirements to ensure that international producers were willing to supply green hydrogen. There is a risk that a sustainable supply of green hydrogen will not be achieved.

In general, the Federal Ministry for Economic Affairs and Energy has recognised the need for action. At the same time, it does not consider its own measures to be sufficient to offset the cost disadvantages of hydrogen in the foreseeable future.

We believe that the hydrogen strategy needs to be subjected to a reality check. To this end, the Federal Government must examine as to whether and when green hydrogen can be made available in sufficient quantities, at a competitive price and in a climate-neutral and sustainable manner.

If it cannot find solutions to the existing challenges, it will need a plan B in good time to achieve climate neutrality by 2045 without a permanently subsidised hydrogen economy.

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