“Not long ago, hydrogen was one of the most hyped topics in the energy sector. As an energy carrier—which, in the best-case scenario, is climate-friendly—it is considered indispensable for decarbonization in areas where direct electrification is not technically feasible, such as the steel or chemical industries, as well as in aviation and maritime transport. Furthermore, it is intended to serve as an interim storage medium for green electricity, thereby enhancing security of supply.
However, things have become worryingly quiet around this great hope. If anything, it is mostly negative news that has made headlines. Despite a pledged 1.3 billion euros in government subsidies, the steel giant ArcelorMittal scrapped plans last year to build direct-reduction plants for the production of "green steel" using hydrogen. While the German federal government appointed new members to its central advisory body—the National Hydrogen Council—in mid-July (a body once chaired by Katherina Reiche, CDU), research in this field has recently faced severe cutbacks.
Now, the think tank Epico is sounding the alarm. "Based on our current understanding, hydrogen remains indispensable in key areas of application—both for achieving climate goals and for reasons of resilience and competitiveness," states a new paper, which was made available to the F.A.Z. in advance. "At the same time, it is becoming more expensive, scarcer, and will be available later than originally hoped." The paper adds: "Never before have there been so many strategies, subsidy programs, and policy objectives—yet, increasingly, projects are failing due to a lack of investment decisions." The Association of German Chambers of Commerce and Industry (DIHK) expressed a similarly pessimistic view in mid-July.
Experts at Epico identify three structural problems. First, they argue that renewable hydrogen and its derivatives—such as ammonia or methanol remains far too expensive. Secondly, the market is failing to coordinate the simultaneous development of supply, demand, and infrastructure—the classic "chicken-and-egg" problem. Thirdly, a complex web of regulations from Berlin and Brussels is hindering investment.
According to the report, renewable hydrogen currently costs between 240 and 350 euros per megawatt-hour, while "blue" hydrogen—produced from natural gas—costs roughly 120 to 150 euros. By comparison, natural gas itself costs just under 50 euros. The International Energy Agency has also repeatedly revised its cost projections upward. Experts at Epico state that the key prerequisites for economic viability are a reliably rising carbon price combined with low-cost electricity. Only when electricity prices reach 35 to 50 euros per megawatt-hour will hydrogen approach a price point that industry is willing to pay.
Another major issue is the sluggish development of production capacity, both domestically and abroad. "Economies of scale, learning curves, and lower financing costs only emerge once production volumes are sufficiently high," the report notes. The German federal government’s goal is to have at least ten gigawatts of electrolysis capacity installed in Germany by 2030.
However, the Institute of Energy Economics at the University of Cologne (EWI) concluded at the end of May that only 181 megawatts are currently in operation, with just another 1.3 gigawatts expected to come online by the end of the year. Furthermore, while many projects (totaling 7.2 gigawatts) are in the planning stages, no final investment decisions have yet been made.
EU regulations defining what qualifies as "green" hydrogen are also making life difficult for operators. For instance, starting in 2028, they will be required to prove that the renewable electricity used for production comes from newly constructed non-subsidized wind or solar farms. Furthermore, electricity generation and hydrogen production must take place almost simultaneously; otherwise, the latter is not considered "green"—a bureaucratic regulatory framework that the industry argues hinders investment.
However, even if all announced electrolysis projects were to become operational by 2030, Germany would still produce less than 30 terawatt-hours, according to EWI estimates. "The National Hydrogen Strategy projected a demand of 95 to 130 terawatt-hours. Consequently, the majority of this volume would have to be met through imports—which, in turn, depend on the realization of both the planned domestic projects and electrolysis projects abroad," says Ann-Kathrin Klaas of the EWI.
The point Klaas is making is that the outlook for the construction of import pipelines is also poor. The German government’s import strategy, adopted in 2024, envisions that 50 to 70 percent of the required supply will be imported from Northern Europe, the Middle East, and parts of Africa. However, the EWI notes that while there are many announcements—including 22 planned pipelines and terminals, half of which are slated to be operational by 2030—there have been few concrete investment decisions.
To date, Germany has only two import terminals, both of which currently handle fossil-based ammonia. Furthermore, while plans for a domestic "core network"—to be developed in stages by 2032—are well advanced, it remains unclear how the hydrogen will ultimately reach potential end-users.
Epico observes that demand for hydrogen is "not yet developing in a sufficiently reliable or cross-sectorally coherent manner." This is despite the existence of numerous policy instruments—such as the greenhouse gas quota for the transport sector, which was reformed this spring—specifically designed to foster such development. This quota mandates that oil companies reduce their CO2 emissions by 65 percent by 2040. To achieve this, they must, among other things, incorporate a minimum share of renewable fuels of non-biological origin (RFNBOs), such as green hydrogen. Additionally, under EU plans, the industrial sector is expected to ensure that 42 percent of its hydrogen demand is met by "green" hydrogen by 2030.
Overall, Epico notes that the scope for the cost-efficient use of hydrogen remains "narrower than originally hoped."
To keep the expenditure of public subsidies limited, the think tank recommends directing them primarily toward applications that otherwise have little chance of decarbonization—such as the steel and chemical industries, aviation, and shipping.
In other sectors, by contrast, "efficiency gains, direct electrification, grid expansion, or demand-side flexibility options are more cost-effective and yield results more quickly."
“Furthermore, the German federal government should work with other member states to establish a European hydrogen alliance, with the aim of jointly planning cross-border infrastructure and aggregating demand.” [1]
1. Die große Wasserstoff-Ernüchterung: Industrie und Wissenschaft sind konsterniert: Der Hoffnungsträger der Energiewende wird teurer, knapper und ist später verfügbar als erhofft. Ein Überblick über die Probleme im Hochlauf. Frankfurter Allgemeine Zeitung; Frankfurt. 05 Aug 2026: 17. Von Hanna Decker, Frankfurt
Komentarų nėra:
Rašyti komentarą