Germany's Green Hydrogen Ramp-up Reliant on Public Money, E.ON Says

The development of a green hydrogen market in Germany still depends heavily on public spending, utility E.ON said on Friday. The share of projects under construction or equipped with final investment decisions has risen to 9% from 3% of the 2030 target of 11.3 gigawatts (GW) of electrolysis capacity, E.ON said.

The only factor accelerating this progress has been the support pledged under government schemes, according to research conducted by E.ON in collaboration with the EWI energy research institute.

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WHY DOES IT MATTER?

Germany aims to develop electrolysis capacity to produce its own green hydrogen using wind and solar power. This effort seeks to clean up carbon-heavy industries like steelmaking and cement, replacing fossil fuels.

However, E.ON noted that rigid or missing hydrogen regulations leave potential investors uncertain about the emerging value chain. High electricity prices further make future hydrogen costs appear prohibitively expensive.

Failure to transition to hydrogen could mean Germany’s industries miss out on opportunities to compete with global players like the United States and China.

BY THE NUMBERS

Domestic electrolysis capacity has grown approximately 68% since spring, reaching 111 megawatts (MW), the research revealed. E.ON also said the Berlin government’s targets for adequate import facilities by 2030 might still be achievable.

The government predicts hydrogen demand of 95-130 terawatt hours (TWh) annually by 2030, with 50%-70% expected to come from imports. Plans for a core hydrogen pipeline grid, designed to complement seaborne imports, have secured a 24 billion euro ($25.31 billion) loan from state lender KfW.

KEY QUOTES

"The run-up of the hydrogen economy remains weak," E.ON said.

"Only the support pledges under the Important Projects of Common European Interest (IPCEI) are boosting increases in production capacity and in investment decisions."

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