A study by the Norddeutscher Reallabor (NRL) highlights the pivotal role of green hydrogen in Germany’s industrial decarbonization efforts. The study estimates the country’s future demand for green hydrogen to reach at least 211 TWh annually as industries transition to climate-friendly technologies.
Green hydrogen, produced from renewable energy sources, is deemed indispensable for decarbonizing five out of seven energy-intensive industries analyzed in the study. However, its current production costs of €7.99 per kilogram hinder its competitiveness against fossil fuels.
The study underscores the need for economic incentives to promote green hydrogen adoption and maintain Germany’s pioneering position in sector coupling, particularly in the North.
Green Hydrogen’s Industrial Decarbonization Potential
Green hydrogen is well-suited as a reducing agent in the production of copper and pig iron, as well as for synthesizing products like ammonia, methanol, e-fuels, and other chemicals. However, it plays a less significant role in aluminum production, where inert anodes for direct electrification are favored for decarbonization. Similarly, no viable strategy exists yet for using green hydrogen to reduce emissions in cement production.
Green Hydrogen Demand Projections
The study forecasts the future demand for green hydrogen in the identified industries:
- Green ammonia production: 13.8 TWh
- Green methanol production: 9.6 TWh
- Primary steel production: 68 TWh
- Copper reduction: 30 GWh
- E-fuels and chemicals production: 828 TWh (expected to change significantly with mobility transition)
- Synthetic kerosene for aviation and synthetic hydrocarbons: 120 TWh
“To maintain current production volumes in Germany while decarbonizing, industrial hydrogen demand would be at least 211 TWh,” states study author Lucas Jürgens from HAW Hamburg’s Competence Center for Renewable Energies and Energy Efficiency (CC4E).
Green Hydrogen Costs: The Competitiveness Challenge
The study emphasizes the economic viability of green hydrogen compared to fossil fuels. Achieving cost parity remains a challenge. With current green hydrogen production costs in Germany estimated at €5.99/kg (Hydex) and €7.99/kg (Hydrix), competitiveness remains elusive.
The study identifies price thresholds for green hydrogen to compete with fossil fuels:
- Green ammonia production: €4.40/kg H2
- Green methanol production: €3.01/kg H2
- Copper reduction: €2.86/kg H2
- Primary steel production: €2.13/kg H2
Despite the cost hurdles, the study identifies potential levers to enhance competitiveness, such as technological advancements, economies of scale, and rising CO2 emission costs.
Promoting Local Green Hydrogen Production
The price gap between locally produced green hydrogen and fossil fuels highlights the need for action. While importing green ammonia and methanol from countries with cheaper production costs is an option, it could threaten Germany’s domestic chemical industry.
“Even if Germany cannot achieve complete self-sufficiency, consistently developing local electrolysis capacities and hydrogen infrastructure is crucial for rapid decarbonization,” asserts Mike Blicker, NRL project coordinator.
With abundant wind power, Northern Germany is well-positioned to lead sector coupling with hydrogen-based processes. Maintaining know-how and technical competence in Germany is essential for long-term development.
