Germany has set an ambitious target to install around 20 gigawatts (GW) of electrolysis power by 2030, aiming to lead in the global hydrogen economy. However, a recent analysis by BBH Consulting Group, drawing on data from the International Energy Agency, reveals a significant gap between goals and current progress.
With only approximately 0.63 GW receiving final investment decisions, Germany is far below its National Hydrogen Strategy (NHS) target of 10 GW by 2030. This shortfall raises concerns about the feasibility of Germany’s hydrogen transformation, especially for small and medium-sized enterprises (SMEs) and the transport sector.
The projects that have secured investment are primarily for large industrial applications, such as steelworks. This focus on heavy industry, while important, leaves SMEs and the transport sector without the necessary support to transition to hydrogen. Without suitable funding architecture, these sectors may face delays, resulting in higher energy costs and increased expenses related to emissions trading and levies.
The lack of investment in regional hydrogen economies highlights another critical challenge. SMEs, which form the backbone of the German economy, need tailored funding frameworks to participate in the hydrogen ramp-up effectively. The National Hydrogen Regions Association (BdWR) has proposed the H2Regional concept to address this issue, advocating for a special funding architecture to support regional hydrogen economies.
The H2Regional concept differentiates between investment cost (CAPEX)-dominated sectors, like transport, and operational cost (OPEX)-dominated sectors, such as hydrogen generation and process heat supply. By providing targeted financial support, H2Regional aims to enable regional economic actors to invest in the hydrogen transition, contributing to regional value creation and system stability.
Implementing H2Regional could increase system resilience by reducing local feed-in management issues, enhancing system stability, and minimizing the need for compressor systems in the core network. This approach not only supports regional economic actors but also strengthens the overall hydrogen infrastructure.
Dr. Stefan Kerth and Prof. Dr. Gerald Linke, spokespeople for BdWR, emphasize the need for federal government support to enable regional actors to participate in the hydrogen economy. They argue that a robust, regionally focused funding framework is essential for Germany to meet its hydrogen goals and ensure that SMEs can contribute to and benefit from this transition.
The federal government has also pushed for the adoption of hydrogen in the transport sector through initiatives like the procurement of clean road vehicles law and the EU Fleet Regulation. These measures mandate the procurement of emission-free buses, which will be supported by municipal companies. However, achieving these targets requires substantial investment and coordination with regional actors.
