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The National Hydrogen Strategy


Germany has set itself ambitious energy and climate targets. By 2045, Germany wants to achieve greenhouse gas neutrality. To achieve these goals, there is need to significantly increase energy efficiency. Germany also needs to decarbonise its energy and raw material supply, which is still largely based on fossil fuels, by switching to renewable or renewable-based energy sources, such as hydrogen. The Federal Government has therefore developed a National Hydrogen Strategy to drive forward the use of climate-friendly hydrogen technologies. On this page, you can learn more about the goals of this strategy, how it is being implemented, and what funding opportunities are available.


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Goals of the National Hydrogen Strategy

Hydrogen is a versatile chemical feedstock and energy carrier that can be used to secure energy supplies for many sectors. If produced in a climate-friendly way, it has the potential to significantly reduce carbon emissions and bring them down to zero.

However, the production of hydrogen is comparatively energy-intensive, which is why it should be used primarily for applications where renewable electricity cannot be utilised directly. In addition, the costs of producing hydrogen are currently still high, and the capacities for generating it are insufficient. This means that large investments need to be made in developing electrolysis capacities, compensating higher operational production costs, as well as ensuring stable conditions for selling green hydrogen at an economically viable price. The Federal Government is supporting these efforts through the National Hydrogen Strategy. In total, several billion euros are to be made available from federal funds and Länder (Federal states) to promote hydrogen generation, build the necessary infrastructure, and enable its use.

Hydrogen technologies are not only an important tool for mitigating climate change, but can also give rise to new branches of industry offering many sustainable jobs and major export opportunities. Many German companies, including start-ups and SMEs, are already among international leaders in hydrogen technologies, for example in the field of electrolysers for hydrogen production and the manufacturing of fuel cells, which are used to generate electricity from hydrogen. The National Hydrogen Strategy is thus designed to help Germany maintain and further expand its strong position in hydrogen technologies.

The strategy pursues the following objectives in particular:

  • Establishing hydrogen produced from renewable energy and its downstream products as key elements of the energy transition to reduce greenhouse gas emissions.
  • Creating a domestic market as a first step in market ramp-up by building appropriate hydrogen production capacity and developing technologies for the use of hydrogen on the demand side.
  • Devising a regulatory framework for the development and expansion of the necessary transport and distribution infrastructure.
  • Strengthening the competitiveness of German companies by promoting the use, research, development and export of hydrogen technologies.
  • Securing the future supply of hydrogen from renewables and its downstream products with the help of international partnerships. These partnerships should be at a European level because of the shorter transport distances involved, but should also include non-European countries with high potential for renewable energy.

Hydrogen Strategy action plan

The National Hydrogen Strategy sets out first-phase plans for launching the market ramp-up of innovative hydrogen technologies by the end of 2023, including an action plan detailing specific measures to be taken. It is intended to lay the basis for private investment in the production, transportation and use of hydrogen. The measures laid out in the action plan are divided into eight areas:

1. Hydrogen production

One of the key bases for a hydrogen economy is for there to be reliable and sustainable production of hydrogen which can be provided at competitive costs compared to conventional energy sources. In order to significantly reduce production costs, generation plants (i.e. electrolysers) must first be built on an industrial scale to produce “green” hydrogen. Parallel to this, renewable energy needs to be expanded at a greater rate in order to provide the green electricity needed to produce this green hydrogen. For investments in hydrogen production to pay off, there must also be appropriate demand for hydrogen on the application side. The measures to promote hydrogen applications are first of all targeted at sectors in which the use of hydrogen is close to being economically viable, as well as at industries in which no alternative decarbonisation technologies are available (e.g. the steel and chemical industries).

2. Transport

Hydrogen is an important building block for sustainable and climate-friendly mobility and complements other alternative forms of propulsion across all modes of transport. The use of hydrogen offers a particularly high level of potential for large and heavy vehicles (e.g. in road haulage, air traffic, and maritime transport), either in fuel cells or as a feedstock for renewable electricity-based fuels, as battery-electric drives are not suitable for application throughout. Specific measures in the transport sector include promoting green hydrogen in fuel production and as an alternative to conventional fuels, e.g. in aviation. Other funding measures are targeted towards research and development as well as investments in hydrogen vehicles, especially in road haulage, air traffic, and maritime transport.

3. Industrial sector

The Federal Government is promoting the switchover from the use of fossil technologies towards processes that are low-greenhouse gas (GHG) or GHG-neutral. The aim is to reduce the amount of process-related emissions from industry. This shift plays a key role in the steel and chemical industries in particular. One example of this is the Carbon2Chem project, which is about converting blast-furnace gases from steel production into input products for fuel, plastic or fertilisers. This is to be achieved by cross-sector cooperation between the steel, chemical, and energy industries. In addition to providing investment grants, the Federal Government also plans to introduce a number of funding instruments to help electrolysis plants achieve economic viability. ‘Carbon contracts for difference’ between the state and companies in energy-intensive industry are designed to compensate for the higher cost of climate-friendly production processes compared with conventional processes. The aim is for them to provide incentives for the early implementation of climate projects.

4. Heat

Since 2016, the Federal Government has been promoting the purchase of highly efficient fuel cell heating appliances in the buildings sector. This grant scheme will run until the end of 2022, and may continue depending on the outcome of an evaluation planned during the course of the year. The question here is in what ways fuel cell technology can continue to be supported within the framework of technology funding. If the grant scheme continues, clear reductions in costs will have to be laid down in the provisions underlying it.

5. Infrastructure/supply

Another key basis for a hydrogen economy is having a secure, demand-driven and efficient supply of hydrogen. The potential for repurposing existing infrastructure, such as natural gas pipelines, is currently being explored and the government is providing support for this. Funding is being channelled into establishing supply structures, where necessary. Special attention is being given to expanding the network of hydrogen refuelling stations for road transport, rail networks and waterways.

6. Research, education and innovation

Technological innovation is massively driven by new scientific findings. This is why the Federal Government has set up research funding initiatives, which will lay the foundation for future market success along the entire hydrogen value chain and accelerate the transfer of innovations into industrial practice. The three Hydrogen Flagship Projects H2Giga, H2Mare and TransHyDE, and the four Kopernikus projects deserve special recognition in this context. The interministerial research campaign entitled ‘Hydrogen Technologies 2030’ strategically bundles research measures on key hydrogen technologies. These include the relatively small but numerous applied energy research projects, the ‘Regulatory Sandboxes of the Energy Transition’, which demonstrate new technologies on an industrial scale (five launched since 2020), and the technology-neutral, interdisciplinary forum called the ‘Hydrogen Research Network’.

7. Need for action at European level

Germany also wants to drive the ramp-up of hydrogen technologies at EU level. Against the background of the European Green Deal, the Federal Government is still working towards an accelerated implementation of the EU hydrogen initiatives. An important step here was the creation of a new Important Project of Common European Interest (IPCEI) on hydrogen as a joint project with other Member States, which was launched at the end of 2020. Under this European funding instrument, flagship projects that address the entire hydrogen value chain are to receive support.

To create a common internal market, it is also important to develop reliable sustainability and certification standards that are uniform throughout Europe. Looking ahead, the global trade in hydrogen will require compatibility with international standards, and this needs to be taken into account today. These include, for example, proof of origin for electricity from renewable energy and for green hydrogen.

8. International hydrogen market and external economic partnerships

The market ramp-up of hydrogen technologies cannot function as a stand-alone, German solution, but will ultimately only work within the framework of a global market. This is because the planned domestic hydrogen market will be far from sufficient to provide the quantities of hydrogen needed to decarbonise at the level desired. Germany will have to cover a large proportion of its hydrogen demand via imports. This necessitates stepping up efforts to build and intensify international cooperation on hydrogen at all levels, particularly within the framework of our existing energy partnerships. In addition to securing Germany's import requirements and exploiting export opportunities for German hydrogen technology, German Development Cooperation also helps to sustainably develop the energy supply in the partner countries.

Governance of the Hydrogen Strategy

In order to successfully implement and develop the National Hydrogen Strategy, it is vital to ensure continuous monitoring of progress and to identify potential needs for adjustment. A flexible and output-oriented governance structure has been created to facilitate this goal. This structure ensures the involvement of the relevant stakeholder groups and facilitates efficient cooperation. The following provides a detailed overview of the various stakeholder interactions.

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State Secretaries’ Committee on Hydrogen

The State Secretaries’ Committee on Hydrogen is the decision-making body for the National Hydrogen Strategy. In the event of delays in implementation or a failure to meet the targets of the strategy, the State Secretaries’ Committee immediately takes corrective action. In doing so, it also pays attention to current market trends and to scientific advances. The Committee meets as needed on an ad hoc basis to adopt targets, develop the programme and take concrete measures to enhance the strategy.

National Hydrogen Council

The National Hydrogen Council is an independent, non-partisan advisory body. The Council is currently made up of 25 high-level experts from economy, science and civil society. Further information on the National Hydrogen Council can be found here.

Hydrogen Coordination Office

On behalf of the Federal Government, the Hydrogen Coordination Office supports the ministries in the implementation of the National Hydrogen Strategy. Moreover, it is available to lend support to the National Hydrogen Council, for instance in drawing up recommendations for action. The Coordination Office is also responsible for monitoring the National Hydrogen Strategy.

Cooperation between federal and state governments

Aside from the measures taken at federal level, the Länder have also been planning and implementing their own hydrogen-related measures that can make a vital contribution to the creation of a hydrogen economy. A Federal-Länder working group has been set up to facilitate the coordination of the measures taken at federal and at state level. Furthermore, up to four Länder representatives may take part as guests in the meetings of the National Hydrogen Council.

The National Hydrogen Council

The establishment of a hydrogen economy is a task that involves all of society. With a view to giving due consideration to the different perspectives and insights from science, business and civil society, the Federal Government followed up its adoption of the National Hydrogen Strategy on 10 June 2020 by appointing a number of experienced hydrogen experts (representatives from companies, research institutions, environmental organisations and trade unions) as members of a National Hydrogen Council.

The task of the Council, which currently has 25 members, is to act as an independent and non-partisan expert body that provides advice to the State Secretaries’ Committee on Hydrogen in the form of suggestions and recommendations for action regarding the further development and implementation of the National Hydrogen Strategy. To organise its activities, the National Hydrogen Council has set up working groups on four fields of interest:

  • research and development needs,

  • production, import, and integrity assurance,

  • transport, distribution, storage and heat,

  • hydrogen applications (including two sub-groups on “industry” and “mobility and other energy applications”).

Members of the National Hydrogen Council are not part of the public sector, which is why the perspectives they offer on the topic are different from those of policymakers. Their expertise covers a very broad range of fields, including hydrogen research and production, infrastructure, climate and sustainability, decarbonisation of industry, transport and buildings, as well as international cooperation. This comprehensive expertise and the variety of perspectives offered by the members of the Council feed into the statements and position papers drafted by the Council on key hydrogen-related issues. To find out more about the National Hydrogen Council, please click here.

Status of implementation of the National Hydrogen Strategy

Since the adoption of the National Hydrogen Strategy on 10 June 2020, the Federal Government has moved quickly to implement it, putting in place key factors for private-sector investment and for research initiatives. In autumn 2021, an initial stocktake of progress was conducted, published as the ‘Report by the Federal Government on the implementation of the National Hydrogen Strategy’(German). Key measures implemented or initiated within the first 15 months of the strategy's adoption include the following:

  • Launch of the Important Project of Common European Interest (IPCEI) in the field of hydrogen: As part of the national call for expressions of interest, 62 projects from right across the hydrogen market value chain were selected for funding at the end of May 2021. A total of more than €8 billion from the federal and Länder governments is available for this purpose.
  • Launch of the ‘Decarbonisation of Industry’ funding programme to support investments in hydrogen technologies in energy-intensive industries.
  • Development of a pilot programme entitled ‘Carbon Contracts for Difference’: These contracts between the state and companies in energy-intensive industry are intended to compensate for the higher cost of climate-friendly production processes compared with conventional processes in order to provide incentives for the early implementation of climate projects.
  • Ambitious national implementation of the EU Renewable Energy Directive (RED II) in the transport sector with the aim of establishing “green” hydrogen in fuel production.
  • Launch of the ‘Hydrogen Technologies 2030’ research drive, in particular of the flagship projects H2Giga, H2Mare and TransHyDE, which address key challenges in the hydrogen value chain.
  • Reduction of price components induced by the state (such as the EEG surcharge) in the production of “green” hydrogen.
  • Increased development of international partnerships, e.g. with Australia and Namibia, especially in the construction and operation of plants to produce “green” hydrogen, as well as for the analysis of the potential for hydrogen production in western and southern Africa and for transport to Germany.
  • Development of the (double) auction model ‘H2Global’ to stimulate investments in production facilities for green hydrogen and its derivatives outside the EU, along with the related supply chains to Germany.

The hydrogen market will, of course, take time to develop. Support programmes need to start first, and companies also need time to plan investments and convert production processes. At the same time, the great response to the Federal Government’s activities from the business communities, and the numerous ideas for projects, show that the roll-out of hydrogen based on the National Hydrogen Strategy has started well and that there is a high level of willingness to invest.

Hydrogen is an issue that is developing dynamically. The Federal Government therefore plans to comprehensively revise the National Hydrogen Strategy before the end of 2022 (including doubling domestic electrolysis capacity from 5 to 10 GW). The revision will incorporate aspects such as current market developments, experience from funding projects and the more ambitious climate target.

In addition, the Federal Government will do everything in its power to ensure that the policy environment at European level is designed in a way that gives investors a reliable basis on which to plan and a business environment which is globally competitive.

Participating ministries

The implementation and continued development of the National Hydrogen Strategy remains a matter of overarching political importance and is therefore the responsibility of the entire Federal Government.

Together with the Federal Chancellery, the following ministries in particular are involved in the direct implementation of the strategy: