Slow German hydrogen infrastructure buildout risk to climate goals - advisors

Four years after the launch of Germany’s national hydrogen strategy, the buildout of hydrogen infrastructure is behind schedule and could run into serious trouble that scares away investors looking for reliable framework conditions, the country’s National Hydrogen Council (NHC) has said. “This has far-reaching implications for the achievement of climate protection targets, the attractiveness and resilience of Germany as an industrial location as well as the goal of becoming a leading provider of hydrogen,” the government-appointed advisory body said in a statement. Moreover, the delay means that the country’s ability to receive enough of the synthetic gas produced with renewable energy sources from a variety of suppliers is called into question. “There is a risk of value creation chains being relocated abroad – with corresponding job losses and diminished competitiveness for many economic sectors that still rely on gas-based energy supply,” the council said.

Green hydrogen continues to be a key for mastering the transformation towards a greenhouse gas neutral economy, council head Katherina Reiche said. “We cannot afford any further delays in scaling up our hydrogen infrastructure,” she warned. One of the main reasons for the stalled launch has been the high price that potential buyers are simply unable or unwilling to pay, the NHC said. Instruments to bridge this gap are available but underfunded, while a complex and “too restrictive” regulatory framework further complicates a fast buildout of hydrogen-ready infrastructure. All this led to a situation in which “ambiguous messages and developments mean that there is no trust that policymakers will support the scale-up in the long run,” the council said.

While there are many political pledges to boost the country’s hydrogen infrastructure, there is a widening gap between stated ambitions and actual achievements on the ground, both at the national and at the European level, for example in the context of the EU’s IPCEI (Important Project of Common European Interest) scheme, the NHC added. This could be seen in the difference between the planned 2030 green hydrogen production capacity of 10 gigawatts (GW) and the capacity of projects that already have secured an investment decision, which amounts to only 0.3 GW, the NHC said.

In the fight against climate change, hydrogen made with renewable electricity is increasingly seen as a silver bullet for sectors with particularly stubborn emissions, such as heavy industry and aviation. Germany aims to become a global leader in the associated hydrogen technologies, and the government has penned a national hydrogen strategy to fulfil these ambitions.