Germany's hydrogen dream: targets are receding, what's next?

Germany should act quickly to kick-start the development of its hydrogen economy. The current target of 10 GW of electrolyzer capacity by 2030 is already out of reach due to the lack of activity, and the country will be “lucky” if it reaches at least 5 GW. According to foreign news outlet Clean Energy Wire, this was stated by the Association of German Engineers (VDI).

Although the recently signed coalition agreement between Germany’s conservative CDU/CSU alliance and the Social Democrats (SPD) contains some positive signals for the development of hydrogen projects, many aspects are still too “vague”, according to VDI.

Michael Sterner, a hydrogen expert at VDI, said that the development of Germany’s hydrogen economy has yet to get fully underway, largely due to the classic chicken-and-egg problem.

“Both potential producers and consumers of green hydrogen and its derivatives face significant purchasing and supply risks on the one hand, and high profitability risks on the other,” Sterner said.

Concrete steps needed

To change the situation in Germany, the association has proposed 28 concrete measures aimed at kick-starting the development of the hydrogen economy. The first set of measures focuses on making hydrogen competitive with fossil fuels, while the next aims to boost demand from industry. Recommended measures include tax breaks, targeted financial mechanisms and quotas for the share of “green gases”.

Sterner added that Germany’s 2030 target of 10 GW of electrolyzer capacity is already out of reach, and that the country will be “lucky” if it builds 5 GW of electrolyzers. Germany currently has around 150 MW of production capacity, while planned projects have a total capacity of around 13 GW.