Hydrogen – fuel of the future? Can Germany’s hydrogen strategy be achieved?

Germany, along with other leading nations, has spearheaded the development of its national hydrogen market. Hydrogen itself of course is color and odorless but in order to keep track of the production methods, colors are used to describe the hydrogen’s origin.

Naturally occurring hydrogen, white hydrogen, is rare. Hence hydrogen has to be produced using other primary energy sources. Amongst those types of hydrogen are black, grey and brown hydrogen which are produced using coal, natural gas or lignite. This releases CO2 and other greenhouse gasses into the atmosphere. Blue hydrogen is produced mainly from natural gas but as the greenhouse gasses are captured (via CCS, Carbon Capture Storage) this method is considered to be less CO2 intensive than black, grey or brown Hydrogen.
Green Hydrogen is produced by electrolysing water using renewable energy sources such as solar or wind energy. Germany has set the goal for green hydrogen to be the long-term solution but will use other colours of H to a limited extent as the Hydrogen market ramps up.

Countries around the world are gearing up to decarbonize their economies.
In the context of EU energy transition Germany’s commitment to achieving climate neutrality by 2045 underscores the urgency of transitioning to cleaner energy sources.
The passing of the federal Climate protection act not only puts the government under pressure to reach its sustainability goals but the industry as well.

C02 taxes for instance make energy and greenhouse gas-intensive industries more expensive by the year, which is why hydrogen presents itself as a promising solution, complementing renewable energies as excess energy can be stored in the form of hydrogen which could help stabilise the energy grid.
Green Hydrogen offers a clean alternative to fossil fuels in various sectors and could help reduce reliance particularly admits recent geopolitical tensions.
Germany, which has already received the nickname Hydrogen Republic of Germany wants to be at the forefront of this development and capitalize on the economic opportunities which this transition will undoubtedly bring.

Current situation
Energy-intensive industries such as steel production or the chemical industry have been using hydrogen for centuries.
Both as an energy source and a raw material.
In 2020 approximately 60TWh which equals 1.8 mil tons of hydrogen were used, of which only 5% were produced with renewables.

Due to challenges in storage and transportation hydrogen is traditionally produced and used on-site, which hindered its widespread adoption
However recent innovations and investments including substantial funding from the German government’s climate transformation fund have propelled the development and adoption of hydrogen technologies.

International collaboration in research and innovation has secured Germany sustainable trade partnerships for future hydrogen import.

Assured by substantial funding, the industry is planning to or has already adopted hydrogen into its production processes.

Germany’s hydrogen “core” network for the distribution of hydrogen and other infrastructure elements are currently under development.

And there are many more projects regarding import, production and research in the pipeline.


Despite significant progress, there are numerous obstacles to consider.
Obstacles and risks that could significantly slow Germany’s energy transition.
Although the knowledge of hydrogens potential has been around for approximately 200 years, the hydrogen economy has to develop from the ground up, together with its applications.
That makes two moving targets which makes a prognosis on how the market will develop and whether Germany’s hydrogen strategy can be achieved especially difficult.

For instance: The likelihood of a delay in the completion of construction of the import infrastructure for hydrogen and its derivatives is to be assessed as moderate given the analogy drawn from the expansion of renewable energies and power distribution network in Germany.

Funding, approval processes and bureaucracy could significantly slow the construction of the hydrogen import infrastructure.

In addition, there is critics who already deem the planned infrastructure to be oversized compared to the demand at this time and too expensive.

The severity of such a delay could be critical as Germany plans to import 50-70% of its annual hydrogen demand as its own production capacities for sustainable H are limited.

An insufficient import and distribution network will cause imbalances in the Hydrogen supply to users.

There is several scenarios on how this could play out:

The equilibrium between supply and demand is crucial for market stability and a sustainable investment environment.

The scenario that supply outgrows demand as applications do not develop as quickly as the import could become problematic.

However, as research from the Fraunhofer Institute suggests, hydrogen demand for green hydrogen could grow to 800TWh (equivalent to 24 million tonnes) by 2050. Germany’s biggest steel producer ThyssenKrupp has announced that their new steel production plant alone will consume 140000 tonnes of hydrogen annually. This is ten times more than the current hydrogen production of the entire European Union!

As defined by the National Hydrogen Strategy, Hydrogen applications will increase in regular intervals (prioritization) – and as many of these applications are still being developed, chances of them outgrowing the Hydrogen supply are considerable.

Possible consequences of the demand temporarily outstripping the supply could be:


  • reduced investment which could cause
  • Innovation stagnation
  • And a Continued reliance on fossil fuels


  • Public perception regarding the government’s ability to mitigate the energy transition might worsen
  • Concerns regarding energy security might multiply


  • Continued reliance on fossil fuels paired with an ever-increasing energy demand would result in increased emissions
  • And a slowed integration of renewable energies as the grid-instability-problem remains unsolved

And that is only considering the known knowns, risks we know we are aware of.

When talking about such a large project with a completely new market it is imperative to consider the known unknowns, risks we are aware of not knowing and unknown unknowns, risks we are not aware of not being aware of (- uncertainties).


With that in mind, mitigation strategies include strong leadership and continuous strategy updates to address evolving challenges and uncertainties.

Money is the foundation for any development, especially when it comes to pulling an entire new market out of the ground.

Although Germany has already invested significant sums, it must be prepared to set aside money to mitigate uncertainties in order to achieve its hydrogen strategy goals.

Hydrogen can not be the only strategy. Considering the unexpected turns that could happen in the upcoming years, focusing on only one option could potentially end in another reliance as Germany has already experienced in the past.

Further pursuing other energy sources is imperative to secure Germany’s energy demand in the near and long term future.


Achieving Germany’s hydrogen strategy goals requires ongoing commitment, proactive risk management and adoption to evolving market dynamics.

Germany’s commitment to reach climate neutrality and the sheer size of investments alone give good reason to believe that the import strategy will be implemented and its own Hydrogen production will be ramped up.

The federal government must remain vigilant, continuously updating its strategy to navigate uncertainties and capitalize on opportunities in the transition to hydrogen as the energy source of the future – by assigning this task to the hydrogen committee Germany has proven its dedication to stay on track.

It remains to be seen how technologies evolve and what more efficient means of hydrogen production, storage and use will be developed and in what way the market will respond to that.

Whether hydrogen is truly the most effective and important aspect of decarbonisation remains to be seen…

3 Replies to “Hydrogen – fuel of the future? Can Germany’s hydrogen strategy be achieved?”

    1. Hey! Thanks for the comment, much appreciated 😊 This is actually the first article I have ever published but because I was interested in the topic to begin with researching for this post did not take up too much time.

    2. Hey! Thanks for the comment, much appreciated 😊 This is actually the first article I have ever published but because I was interested in the topic to begin with researching for this post did not take up too much time.

Leave a Reply

Your email address will not be published. Required fields are marked *