A key indicator of Germany’s hydrogen ambitions has dimmed: despite a national target of 10 GW of installed electrolyser capacity by 2030, just over 1 GW has reached final investment decision.
Germany’s H2UB Boxberg initiative, announced in April 2024, aimed to repurpose decommissioned lignite‑fired units into Europe’s largest green energy hub. The project centred on a modular “flexibility power plant” concept: an initial 110 MW PEM electrolyser converting surplus wind and solar power into green hydrogen, complemented by large‑scale battery storage and hydrogen‑fired turbines to supply firm, around‑the‑clock power. In June 2025, LEAG confirmed it was “postponing plans for hydrogen production in Boxberg and initially shifting our focus to other technologies for the generation, storage, and flexible provision of electricity.”
At its planned peak, H2UB Boxberg would have produced roughly 2.1 tonnes of hydrogen per hour—around 18,400 tonnes annually—feeding a 10 MW fuel cell and providing hydrogen to industrial customers. Modular design promised expansion to 500 MW electrolysis capacity and a corresponding increase in firm power output from hydrogen turbines. Yet the project’s feasibility hinged on multiple enablers that have fallen out of alignment.
First, regulatory uncertainty has dogged the plan. A critical prerequisite—the federal Power Plant Safety Act, intended to define safety and permitting standards for hydrogen‑fired power plants—remained indefinitely delayed by the previous coalition government. Without clear safety regulations and permitting pathways, project developers face open‑ended risk on construction timelines and compliance costs.
Second, shifting public funding priorities have cut into hydrogen’s fiscal support. Germany’s 2026–32 federal budget slashed medium‑term hydrogen funding from €3.75 billion in the previous cycle to just €1.28 billion, even as current‑year allocations held at €490 million. Key programs for system‑serving electrolysers and offshore hydrogen support remain unlaunched and underfunded. Industry group Hydrogen Europe warns that Germany may reach only half its 10 GW target by 2030 under these conditions.
Third, market economics continue to challenge green hydrogen viability. Even with projected PEM electrolyser efficiencies of 65–75 kWh/kg H₂, green hydrogen production costs in Germany remain in the €4–6/kg range—well above natural gas‑based “blue” hydrogen or alternatives. Without a robust carbon price or long‑term offtake commitments from industrial anchors, projects struggle to secure financing. The H2UB Boxberg’s backers had counted on industrial use—steel, chemicals, or cement—but have seen no firm offtake agreements publicly disclosed.
This setback follows a broader retrenchment in Europe’s hydrogen rollout. Just days earlier, ArcelorMittal abandoned its plan to convert two steel plants in Germany to carbon‑neutral production; the company cited elevated energy costs and withdrew from a €1.3 billion subsidy scheme before the June 2025 deadline. Across the European Union, more than half of announced green hydrogen projects have stalled or been cancelled since 2023 due to similar funding gaps and market hesitations.
Yet the H2UB Boxberg concept retains technical merit. LEAG’s choice of PEM electrolysers reflects an emphasis on partial‑load flexibility—crucial for grid balancing in a renewables‑heavy mix—and its integration with large‑scale battery storage would have addressed daily intermittency. Moreover, siting the project at a former lignite plant leverages existing grid connections and real estate, reducing greenfield infrastructure costs compared to remote sites.
To rekindle momentum, policymakers and industry must bridge critical gaps. Accelerating the Power Plant Safety Act’s implementation and clarifying permitting frameworks would de‑risk project timelines. Restoring medium‑term funding envelopes closer to initial strategy levels—ideally through revived IPCEI partnerships—could underwrite FEED studies and first‑of‑a‑kind risk. Finally, establishing binding offtake frameworks—via carbon contracts for difference or price‑indexed industrial agreements—would shore up revenue certainty, enabling financiers to underwrite large‑scale electrolyser deployments.
Until these measures materialize, H2UB Boxberg and similar ambitions may remain on ice. The technical blueprints are sound, but without coherent policy and commercial underpinnings, Germany’s hydrogen transition risks sputtering well short of its 2030 objectives, leaving stranded capacity and unfulfilled decarbonization targets in its wake.
