Germany leads: Rules for hydrogen network financing move ahead of European legislation

Germany could soon become the first European country to introduce a framework to support investment in hydrogen infrastructure. European rules are still under negotiation, but investors need a clear framework as soon as possible. Germany is therefore preparing its own legislation and state guarantees.

Hydrogen is expected to play a key role in decarbonising industrial sectors such as steelmaking and chemicals. However, unlike other fuels such as oil and gas, which took decades to build their storage and transport networks, the hydrogen industry, which is still developing, has just ten years to build its infrastructure.

With demand remaining low, private financing is unable to keep pace with the rate of development policymakers want. Banks are reluctant to offer favourable terms, while technology pioneers cannot cover all the investment costs.

Risks related to amortisation are currently holding back private-sector investment in hydrogen networks, according to a draft amendment to the Energy Act currently circulating in Berlin. Euractiv reports, having obtained a copy of the draft legislation.