Germany’s ambitious drive to scale green hydrogen is faltering under financial and regulatory pressures, as the largest East German energy supplier, EnviaM, withdraws from the prominent “Green Bridge” project.
The “Green Bridge” initiative, central to Central Germany’s decarbonization plans, was intended to supply green hydrogen via dedicated pipelines from regional electrolysers to key industrial clients, most notably BMW’s Leipzig plant. BMW, which already employs green hydrogen in its paint shop, was to transition from truck-based delivery to direct pipeline supply. With EnviaM stepping back, this logistical evolution now hinges on alternative infrastructure providers, including Leipzig-based gas grid operator Ontras, which may assume part of the development. Though unconfirmed, industry sources suggest Ontras could still connect the automaker to the hydrogen network.
EnviaM, a subsidiary of E.ON, cited economic concerns for its withdrawal. Yet, the timing is consistent with E.ON’s broader strategic pivot. In recent months, E.ON has publicly acknowledged the “deprioritization” of its hydrogen portfolio. The cost of early-stage infrastructure—electrolysers, pipeline networks, and related integration—remains high, with investment returns clouded by slow market uptake and policy ambiguities. Particularly concerning is the pricing gap: industrial users face green hydrogen costs significantly above those of grey hydrogen, limiting their willingness to commit long-term.
BMW’s continued interest signals some industrial confidence, but the case highlights a fundamental tension. While end-users want green hydrogen, few are ready to absorb premium prices without robust subsidies or guaranteed supply chains. Meanwhile, energy suppliers face competing investment needs. For EnviaM, grid expansion and modernization projects—some estimated in the hundreds of millions—may offer clearer ROI and more immediate regulatory support.
Beyond economics, the regulatory landscape adds further complexity. EU taxonomy rules around what qualifies as “green” hydrogen demand strict adherence to electricity sourcing criteria. According to current EU definitions, hydrogen can only be classified as green if it is produced using 100% renewable electricity. A deviation, even to 95%, disqualifies the output. For electrolysers integrated into the broader power grid, where matching every kilowatt-hour with renewable sources is operationally complex, this creates both risk and administrative burden.
Despite these setbacks, momentum in Central Germany hasn’t completely dissipated. In Bad Lauchstädt, the region’s largest electrolyser is on track to begin operations this year, with hydrogen expected to be delivered to Leuna’s industrial chemical complex. These pockets of progress reflect a broader resilience in the sector, even if investor caution is growing.
Stay updated on the latest in energy! Follow us on LinkedIn, Facebook, and X for real-time news and insights. Don’t miss out on exclusive interviews and webinars—subscribe to our YouTube channel today! Join our community and be part of the conversation shaping the future of energy.
