Germany

Solution Statement

For Germany to become greenhouse gas neutral and meet its international obligations under the Paris Agreement, hydrogen needs to be established as a decarbonisation option. This applies in particular to those areas that cannot be decarbonised with the direct use of renewable electricity. The Federal Government considers only hydrogen that has been produced using renewable energy (green hydrogen) to be sustainable in the long term. The Federal Government therefore seeks to use green hydrogen, promote its rapid market rollout and establish the necessary value chains. 

The Federal Government expects that both a global and European hydrogen market will emerge in the coming ten years and that, in the short run, carbon-neutral (for example blue or turquoise) hydrogen will be traded on this market. Given Germany’s close integration in the European energy supply infrastructure, carbon-neutral hydrogen will be relevant for Germany and, if available, will be temporarily used. 

By tabling the National Hydrogen Strategy, the Federal Government is providing a coherent 
framework for the generation, transport and use 

of hydrogen, encouraging the relevant innovations and investment. The Strategy sets out the steps that are needed to meet the German climate targets, create new value chains for the German economy and foster energy policy cooperation at international level. The 

Federal Government recognizes Germany’s responsibility to reduce greenhouse gas emissions globally. By developing the hydrogen market and promoting hydrogen as a decarbonisation option, our country can make a key contribution to climate change mitigation around the world. 

Challenge Statement

The first step that needs to be taken to speed up the rollout of hydrogen technology is establishing a strong and sustainable domestic market for the production and use of hydrogen at home. A strong domestic market will send an important signal, encouraging other countries to use hydrogen technology as well. Germany will design the incentives for speeding up the rollout of hydrogen technology in Germany and particularly for the establishment and operation of electrolyzers in a way that is compatible with the energy transition.

However, the domestic generation of green hydrogen will not be sufficient to cover all new demand, which is why most of the hydrogen needed will have to be imported. There are several places across the EU where large quantities of renewables-based electricity are being generated. These offer great potential for producing green hydrogen. The Federal Government will work to ensure that this potential is tapped and that the generation capacities are further expanded. To this end, it will intensify its cooperation with other European Member States, particularly those bordering the North and Baltic Sea, but also with the countries of southern Europe. 

The use of offshore wind energy will play an important role. The Federal Government will work with the North and Baltic Sea border states to push forward hydrogen production by establishing a reliable regulatory framework for offshore wind energy. It also aims to systematically develop production sites in other partner countries, for example as part of development cooperation.

In developing countries in particular, it is vital to ensure that the export of hydrogen will not be detrimental to possibly inadequate energy supply systems in the exporting countries concerned and thus incentivize local investment in even more fossil fuels. Therefore, the production of green hydrogen is to act as a stimulus for these countries to rapidly expand their capacities for generating renewable energy – these will, after all, also benefit local markets.

Energy Compact Description

As a Global Theme Champion for the energy transition, Germany is committed to adopting a Hydrogen Energy Compact to contribute positively to the SDGs and the Nationally Determined Contributions to achieve the Paris Agreement.

A successful energy transition combines security of supply, affordability and environmental compatibility with innovative and smart climate action. This means that the fossil fuels we are currently using need to be replaced by alternative options, namely renewables and energy efficiency, in accordance with our energy and climate goals. This applies in particular to gaseous and liquid energy carriers, which will continue to be a part of Germany’s energy supply in the future. Against this backdrop, hydrogen will make an important contribution to enhancing and completing the energy transition. 

The Federal Government expects that around 90 to 110 TWh of hydrogen will be needed by 2030. In order to cover part of this demand, Germany plans to establish up to 5 GW of generation capacity including the offshore and onshore energy generation facilities needed for this. This corresponds to 14 TWh of green hydrogen production and will require 20 TWh of renewables-based electricity. 

We will foster and intensify international cooperation and partnerships on hydrogen. This includes establishing joint projects and trialing of hydrogen technology in the area of the North Sea and in southern Europe, in the context of the Federal Government’s energy partnerships and cooperation with partner countries in German development cooperation; systematically supporting ambitious partner countries in developing and implementing green hydrogen policies based on renewable energies to protect the climate; facilitating access to clean energy and green hydrogen research and technology along the entire value chain through international hydrogen cooperation and the long-term networking of the German research landscape; as well as development and support of a common hydrogen market by establishing common regulations.

Energy Compact Indicators

Germany will drive forward the construction of PtX production facilities on a near-industrial scale in some partner countries via several funding programmes and via auctions for green hydrogen and its derivatives via the “H2 Global” scheme (aiming for appr. 500 MW) (From now to 2033)The necessary regulatory basis for the construction and expansion of hydrogen infrastructure will be prepared (From now to 2033).

The issues and conditions that have to be addressed in order to foster a domestic and international ramp-up of hydrogen technologies and to build up an international hydrogen market can only be successful in a European and global cross-border collaboration in order to find solutions for the generation of wind and solar energy in the respective areas and for the distribution of hydrogen. International trade in hydrogen and its downstream products is therefore a significant industrial and geopolitical factor