In early 2024, German manufacturers accelerated marketing campaigns around so-called “H2-ready” gas heaters, promoting them as compliant with the new Building Energy Act. These heating systems are advertised as capable of operating on up to 100% hydrogen in the future.
But while they technically meet the law’s requirement of using 65% renewable energy in new buildings, mounting expert analysis suggests the concept may be little more than a costly detour for consumers—and a lifeline for the legacy gas industry.
At the core of the criticism is basic thermodynamics. Green hydrogen, produced via electrolysis using renewable electricity, suffers significant conversion losses. Jan Rosenow of the Regulatory Assistance Project (RAP) notes that heating with green hydrogen requires five to six times more electricity than a standard air-source heat pump. The efficiency disparity is striking: a heat pump returns roughly three units of heat per kilowatt-hour of electricity, while hydrogen yields just half a unit of usable heat for every unit of power invested.
The result is a pricing reality that will hit end users. With electricity grids already strained and green hydrogen in limited supply, operating an H2-ready boiler with pure hydrogen is likely to be far more expensive than alternatives such as heat pumps or district heating. RAP’s ongoing review of over 60 international energy transition studies found no case where hydrogen heating emerged as the most cost-effective path forward.
The opportunity cost is not merely economic—it’s systemic. The Potsdam Institute for Climate Impact Research recently warned that global green hydrogen production remains well below targets. When supply does come online at scale, industrial sectors like steelmaking, ammonia synthesis, and flexible power generation will likely consume the lion’s share. These sectors, characterized by high-temperature processes and limited electrification pathways, are considered “hard to abate” and thus better candidates for hydrogen deployment.
The Federal Environment Agency echoes this prioritization. It maintains that hydrogen’s role in domestic heating is marginal at best and cautions against relying on it for everyday applications that could be served more efficiently through direct electrification.
Critics argue that the inclusion of H2-ready systems in the Building Energy Act is a result of successful lobbying by the gas industry. Political scientist Christina Deckwirth from LobbyControl characterizes the marketing push as “a license to not act.” According to her, the narrative around hydrogen readiness sustains gas grid infrastructure, delays serious electrification investment, and creates a false sense of progress.
The political compromise embedded in the Building Energy Act allows new buildings to install H2-ready gas systems today, under the assumption that they will run on hydrogen at some undefined point in the future. The danger, says Deckwirth, is the false security it provides: “The impression arises: We only have to wait for the green hydrogen, then everything can stay as it is.”
Erosion of Industry Consensus
The strategic gamble appears increasingly risky. A growing number of municipal utilities have begun withdrawing from “Zukunft Gas” (now rebranded as “The Gas and Hydrogen Industry”), signaling diminished confidence in hydrogen’s role in home heating. These utilities are instead turning toward electrified heat solutions that are both commercially viable today and aligned with Germany’s climate goals.
The withdrawal suggests a widening gap between national policy and municipal implementation strategies—where boots-on-the-ground realities are forcing a reassessment of future-proof investments.
While the technical feasibility of H2-ready systems is not disputed, their practical implementation hinges on assumptions that remain speculative. Without secure access to competitively priced green hydrogen, consumers could be left with expensive systems that run indefinitely on fossil gas—undermining both the spirit and the letter of Germany’s climate legislation.
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