Germany

Country: Germany

Document type: National Strategy

Title: The National Hydrogen Strategy
Released: June 2020

Update to the National Hydrogen Strategy – German Language
Official Joint Press Release: Update to the National Hydrogen Strategy – English Language
Released: July 2023

National Hydrogen Strategy – 2020

  • The 2020 national hydrogen strategy included the following goals or ambitions:
    • Improving the price competitiveness of hydrogen technologies
    • Developing a domestic market for hydrogen technologies and facilitating imported hydrogen
    • Establishing hydrogen as an alternative energy source
    • Establishing hydrogen as a sustainable base material for industrial processes
    • Enhancing the infrastructure for the transport and distribution of hydrogen
    • Improving the policy/regulatory environment, fostering research and skills development
    • Strengthening international relationships and cooperation mechanisms
  • Around 5 GW of hydrogen-generation capacity was planned to be established domestically by 2030. An additional 5 GW of capacity would be added, if possible, by 2035 and no later than 2040. (Note: the Coalition Agreement executed in December 2021 targeted increasing electrolyser capacity from 5 to 10 GW by 2030.)
  • Domestic hydrogen generation would need to be supplemented by imports, requiring establishment of (non-domestic) production capacity and new supply chains.
  • An Action Plan included a first ramp-up phase to 2023 (start market ramp-up, harness opportunities) and a second phase to begin in 2024 (strengthen market ramp-up nationally and internationally).
  • Financial (funding) support measures available for hydrogen applications noted in the strategy included:
    • Access to around €8 billion across various programs supporting the transport application, including €3.4 billion to support construction of charging and refuelling infrastructure (importantly, this latter amount, and also for other transportation-related programs noted, is for all alternative technologies).
    • Up to €0.7 billion to facilitate the use of highly efficient fuel cell heating systems in buildings.
    • Utilisation of up to €2 billion arising from the coalition committee’s ‘package for the future’ of 3 June 2020 to intensify international cooperation on hydrogen.

Update to the National Hydrogen Strategy – 2023

The 2020 strategy remains in place in principle but is further developed to reflect an increased level of climate protection ambition. The update in many cases reflects measures that had already been started in parallel with the development of the update of the strategy or are planned in the period to 2030. Key objectives in the strategy update include:

  • Accelerated market ramp-up of hydrogen: the market ramp-up of hydrogen, its derivatives and hydrogen application technologies will be significantly accelerated.
  • Ensuring sufficient availability of hydrogen and its derivatives: the target for domestic electrolysis capacity in 2030 is increased from 5 GW to at least 10 GW, with residual demand covered by imports. A separate import strategy is being developed.
  • Building a high-performance hydrogen infrastructure: of particular importance is the creation of the necessary hydrogen infrastructure. By 2027/2028, a hydrogen launch network with more than 1,800 kilometres of converted and newly built hydrogen pipelines is to be established in Germany via IPCEI funding. Approximately 4,500 kilometres is to be added throughout Europe (European Hydrogen Backbone). By 2030, all major generation, import and storage centres would be connected to relevant customers by means of expansion.
  • Establishment of hydrogen applications in the following sectors: by 2030, hydrogen and its derivatives are to be used especially in industrial applications, in heavy commercial vehicles as well as increasingly used in air and sea transport. In the electricity sector, hydrogen contributes to energy security; gas-fired power plants that can be converted to climate-neutral gases (hydrogen-ready) and electrolysers that serve the system, in particular as variable and system-serving stabilisers, or flexible loads. For the prospective use of hydrogen in heat supply, the framework conditions are (as of July 2023) being further developed in various forums.
  • Import strategy: English language media reports on the strategy update note that the strategy foresees hydrogen demand to reach 95-130 Terawatt-hours (TWh) by 2030, of which around 50-70% is expected to be covered by imports. The update to the national strategy highlights that an import strategy for hydrogen and its derivatives was in preparation, with the Federal Cabinet adopting the import strategy for hydrogen and hydrogen derivatives in July 2024.
  • The strategy also highlights key objectives around Germany being a leading provider of hydrogen technologies by 2030 and the creation of supporting framework conditions (e.g., legal and regulatory, standards, certification, coordinated administration).

English language reporting notes matters in the strategy update that deal with public funding support for industry development. While direct financial support for hydrogen production is limited to the production of green hydrogen, it is reported that on the application side, other sources of hydrogen could also be supported taking into account greenhouse gas limits and meeting the legal target of climate neutrality.

Key Policy Developments

H2Global

 In June 2021, the Federal Ministry of Economic Affairs and Energy announced the operational launch of the H2Global Foundation. Through H2Global, renewables-based hydrogen or its derivatives would be purchased abroad with long-term contracts and resold in Germany via annual auctions. The Ministry would be providing €900 million to bridge the gap between the purchase price and the domestic sales prices.

In December 2021, the European Commission approved, under EU State Aid rules, the H2Global scheme. As part of the 2023 federal budget, the German Government planned to make a further Euros 3.5 billion available through the Federal Ministry of Economic Affairs and Energy for new bidding rounds with terms until 2036 (such increase being subject to EC approval under EU State Aid rules). Official releases indicate a further amount of €1.4 billion is available under H2Global for a call for proposals through the Federal Ministry for Digital and Transport.

In December 2022, it was announced that the procurement process for the first import of green hydrogen as part of the H2Global programme had begun (for a value of €900 million) for renewable ammonia (Lot 1), methanol (Lot 2), and sustainable aviation fuels (eSAF, Lot 3).

At the end of May 2023, the EC Energy Commissioner and the German Federal Minister for Economic Affairs and Climate Action agreed to enhancing the global hydrogen ramp-up by linking the (EC) European Hydrogen Bank initiative with the German H2Global initiative. The joint media releases noted that H2Global would be open to all EU Governments interested in conducting hydrogen tenders; in addition, H2Global would also work together with the European Hydrogen Bank on joint European auctions open to all EU countries (to make a visible contribution to international hydrogen imports).

In July 2024, H2Global announced the successful bidder of the first H2Global pilot auction for renewable ammonia (Lot 1); no contract was awarded for eSAF (Lot 3).

In December 2024, the EC approved, under EU State aid rules, a €3 billion German-Dutch scheme to support the production of renewable fuels of non-biological origin (RFNBOs), including renewable hydrogen, throughout the world. Germany will contribute to the scheme with €2.7 billion and the Netherlands will contribute with €300 million. The scheme will support the construction of at least 1.8 GW of electrolysis capacity globally. The aid will be awarded through a competitive bidding process planned to be concluded in 2025. The tenders, to be organised on a multi-regional basis, will be open to projects with an electrolyser capacity of at least 5 MW.

In February 2025, the start of the second H2Global tender was announced, following the successful state aid notification for the scheme by the EU Commission. The second supply-side auction is organised into five lots: four regional and one global. A minimum of €484 million has been allocated for the regional lots and a minimum of €567 million for the global lot. The total amount stands at €2.5 billion, with the potential to increase to close to €3 billion pending final budget approvals. This second tender includes a joint lot which will be funded jointly by the governments of Germany and the Netherlands.

European Hydrogen Bank ‘Auctions as a Service’

In December 2023, Germany announced its participation in the European Hydrogen Bank’s EU “Auctions as a Service” mechanism, providing an additional €350 million for electrolyser projects in Germany (this being in addition to the €800 million earmarked by the EU Innovation Fund for projects across the EU). The “Tenders as a Service” mechanism under the Hydrogen Bank allows EU Member States to finance additional projects that participate in the call but can no longer be funded from the [EC] Innovation Fund budget. This tool allows Member States to identify and support competitive projects on their territory without the need for a separate national tender. Member States’ participation is voluntary. In April 2024, the EC approved, under EU State aid rules, this €350 million German scheme to support the production of renewable hydrogen.  The approved scheme would support the construction of up to 90 MW of electrolysis capacity and is expected to incentivise the production of up to 75,000 tonnes of renewable hydrogen.

Pipelines and Coincident Investments

National Hydrogen Core Network

In January 2022, the Federal Network Agency confirmed the scenario framework for the Gas Network Development Plan 2022-2032 with amendments, including that transmission system operators identify those natural gas pipelines that can be converted from natural gas to hydrogen (with the intention of enabling the rapid development of a hydrogen network).

In May 2023, the German Cabinet endorsed an amendment to the Energy Industry Act (EnWG) that provides, amongst other things, the legal basis for the establishment of a hydrogen core network at the level of transmission pipelines.

In July 2023, while the legislative procedure to establish the legal basis for the network was in progress, the transmission system operators published the planning status (pre-optimisation design stage) for a supraregional hydrogen core network by 2032.

In April 2024, it was reported that the German Bundesrat had approved the the amendment to the Energy Industry Act to allow for financing the establishment of the hydrogen core network.

In June 2024, the EC approved, under State aid rules, an estimated €3 billion German scheme to support the construction of the hydrogen core network. The network is to be the backbone of long-distance transport pipelines for hydrogen in Germany and part of the European hydrogen backbone connecting several Member States.

In October 2024, the Federal Network Agency approved the hydrogen core network proposed by the gas transmission system operators (as submitted to the Agency in July 2024). The network is made up of a total of 9,040 kilometres of pipelines that is due to go into operation step by step up to 2032. About 60% of these pipelines are natural gas pipelines that will be converted to hydrogen, while 40% will be newly built. The total investment costs are expected to be €18.9bn.

In November 2024, KfW, the state-owned investment and development bank, announced it was supporting the construction of a national hydrogen core network by financing a new instrument – the amortisation account – whereby KfW would provide a loan for the amortisation account in the amount of €24 billion. In March 2025, KfW announced it had made its first payment into the amortisation account for the amount of €172 million.

In March 2025, Gascade, an independent transmission system operator, announced the initial hydrogen filling of the first section within its Flow program had started, with around 400 kilometres of a previous natural gas pipeline (1.4 metres diameter) to be gradually converted to transport hydrogen by the end of 2025.

In March 2025, the Federal Network Agency announced it had submitted for consultation (with comments received until 2 May 2025) the draft of its definition of the ramp-up charge for the hydrogen core network as well as a key issues paper for a differentiated charging system.

Germany – Norway Pipeline

In January 2023, Germany and Norway issued a Joint Statement on Hydrogen Cooperation confirming a common intent to ensure a large-scale supply of hydrogen with the necessary infrastructure from Norway to Germany by 2030. The two countries commissioned a joint feasibility study to assess large-scale transport of hydrogen from Norway to Germany, and CO2-transport from Germany to Norway.

Coincident to this bilateral strategic partnership initiative, RWE AG and Equinor AS announced a strategic energy partnership, including plans to jointly invest in flexible hydrogen-ready gas-fired power plants in Germany with a total capacity of 3 gigawatts by 2030.

In September 2024, media reports indicated that (Norwegian company) Equinor had cancelled its plans to develop a hydrogen pipeline to export hydrogen from Norway to Germany due to a lack of a viable business case. The report indicated the Norwegian company would continue with plans to build hydrogen-ready gas-fired power plants in Germany along with RWE, but with hydrogen being sourced elsewhere.

H2Med Pipeline

In January 2023, it was announced in a French-German declaration that the two countries would form a joint working group on hydrogen tasked to prepare conclusions and recommendations on strategic choices regarding hydrogen development (aiming for such by the end of April 2023). Also noted in the declaration was that the two countries would take the necessary steps on a European backbone for hydrogen transport across Europe, including the necessary national and transnational hydrogen infrastructures and, in particular, the extension and connection of existing and planned infrastructures, including extension of the H2Med pipeline to Germany in close cooperation with involved partners.

SoutH2 Corridor

In May 2024, Germany, Italy and Austria signed a Declaration of Intent for the development of the SoutH2 Corridor. The SoutH2 Corridor is to facilitate hydrogen imports from North Africa through southern Italy and is then to be connected to hydrogen demand clusters in Italy, Austria and Germany. The Declaration announcement notes that the SoutH2 Corridor is one of the five large-scale pipelines for hydrogen imports that will facilitate the European import of renewable hydrogen by 2030. (Note: The SoutH2 Corridor has been chosen as a Project of Common Interest.)

In January 2025, Italy, Germany, Austria, Algeria and Tunisia signed a joint declaration of intent to continue work on the development of the SoutH2 Corridor.

Germany – Denmark Pipeline

In March 2023, media reports indicated that Germany and Denmark had signed a joint declaration of intent that the countries would cooperate on advancing the roll-out of transmission infrastructure for green hydrogen between western Denmark and northern Germany from 2028, enabling a large-scale transmission interconnector for green hydrogen.

In October 2024, Danish electricity and gas transmission system operator Energinet updated the schedule for the project with the planned commissioning date for the cross-border hydrogen pipeline into Germany at end 2031 (from 2028) with key connections within Denmark to be commissioned in 2032-2033.

In January 2025, the Danish Government announced it is willing to provide funding at billion scale (DKK) to support the emerging Danish hydrogen market, and that the Government is committed to making export to Germany possible from 2030 (with the announcement noting, amongst other things, an increase to government funding to enable establishment of the first stretch of the pipeline).  The announcement notes that a full-scale hydrogen backbone in Jutland also includes expansion further north and east towards Fredericia though meeting the 2030 ambition requires a dedicated focus on building the first stretch of the pipeline from Esbjerg to the German border.

Ptx Development Fund

The PtX Development Fund (initial fund size €270 million), financed by the German Federal Ministry for Economic Cooperation and Development, provides financial support to develop the green hydrogen value chain primarily in developing and emerging economies. As of February 2025, awards of €30 million each have made to two projects in Egypt and Morocco.

Funding – Industrial, Mobility and Related Projects, R&D (non-exhaustive)

 In May 2021, the Federal Ministry for Economic Affairs and the Federal Ministry of Transport announced the selection of 62 large-scale hydrogen projects to be provided with more than €8 billion in federal and state funds as part of a joint European hydrogen initiative (the Important Projects of Common European Interest – IPCEI). Around €4.4 billion is to be provided by the Federal Ministry for Economic Affairs and up to €1.4 billion from the Federal Ministry of Transport, with the remaining funds to be provided by the federal states. The target is for the projects to be approved by the EC under state aid law before the end of 2021. The selected 62 projects can be found here.

In October 2022, the EC approved under the Guidelines on State Aid for Climate, Environmental Protection and Energy 2022, €134 million grant funding to support the construction and installation of a large-scale electrolyser at BASF’s Ludwigshafen site, with an annual production capacity of 54 MW. In March 2025, BASF announced commissioning of the 54 MW electrolyser (annual capacity of up to 8,000 tonnes of hydrogen).

In February 2023, the EC approved, under State Aid rules, a direct grant of €55 million by the German Government to support ArcelorMittal in the construction and installation of a green steel demonstration production facility using 100% renewable hydrogen. The plant would have an annual capacity of 100,000 tonnes of direct reduced iron and is envisioned to start operating in 2026.

In April 2023, the Federal Minister for Economic Affairs and Climate Action together with the Lower Saxony Minister-President handed over a funding notice worth nearly €1billion to Salzgitter AG for its SALCOS project. The Federal Ministry is providing funding as part of the first Important Project of Common European Interest (IPCEI) for hydrogen. Thirty per cent (30%) of the funding will be contributed by Lower Saxony. Under the SALCOS project, a hydrogen-ready direct reduction plant, an electric arc furnace for the production of 1.9 million tonnes of crude steel, and a 100 MW electrolyser, will be built in the town of Salzgitter (as the basis for later transitioning to the hydrogen-based direct reduction method, which will allow part of the conventional furnace route to be replaced). In February 2025, Salzgitter AG announced that it had laid the cornerstone for the 100 MW electrolysis plant, with production starting 2026 at 9,000 tons of hydrogen per annum.

In July 2023, the EC approved, under State Aid rules, German federal and state government funding in support of the ThyssenKrupp Steel Europe decarbonisation project “tkH2Steel” at its Duisburg facility for a total amount of around €2 billion, via an initial grant (of €550 million) and a conditional payment mechanism (of €1.45 billion) to support the first ten years of operations.

In December 2023, the EC approved, under EU State aid rules, a €2.6 billion German measure to support SHS Stahl-Holding-Saar GmbH & Co KGaA (‘SHS’) in partly decarbonising its steel production processes in Saarland, through hydrogen use.  The aid, which will take the form of a direct grant, will support, among other things, the construction of a direct reduction plant and two new electric arc furnaces which will replace the existing blast furnaces and oxygen converters. Natural gas, initially used in the new direct reduction plant, will gradually be phased out of the steel production processes. Ultimately, the new installation will operate using mainly low-carbon and renewable hydrogen.

In February 2024, the EC approved, under State aid rules, a €1.3 billion German measure to support ArcelorMittal Bremen and ArcelorMittal Eisenhüttenstadt (‘ArcelorMittal’) in decarbonising part of their steel production processes.

In April 2024, the EC approved, under the State aid Temporary Crisis and Transition Framework, a €2.2 billion German scheme to support investments in the decarbonisation of industrial production processes through (i) investments in the electrification of industrial processes, as well as (ii) investments enabling the substitution of fossil fuels with renewable hydrogen or renewable hydrogen-derived fuels. Under this measure, the aid will take the form of direct grants.

In July 2024, the German Government announced the official start of implementation of 23 hydrogen projects (including up to 1.4 GW of hydrogen electrolysis production capacity) approved by the EC under state aid law in February 2024 under the Important Projects of Common European Interest scheme Hy2Infra.

In October 2024, Daimler Truck was awarded a grant of €235 million (€158 million – German Federal Government, almost €50 million and €27 million from the states of Baden-Württemberg and Rhineland-Palatinate respectively) to progress the ‘PEGASUS” project; the project involves the development, production and operation of 100 innovative, zero-emission heavy-duty fuel cell trucks in commercial long-haul transport (encompassing the entire ecosystem necessary to operate these trucks).

In December 2024, the EC approved, under EU State aid rules, a €350 million German measure to support Concrete Chemicals GmbH in the production of synthetic aviation fuels. The aid will take the form of a direct grant and will support the construction and installation of the plant in Rüdersdorf, Germany. The plant, with a capacity of approximately 30,000 tonnes of ‘Power-to-liquids (PtL) kerosene’ per annum, is expected to start producing in 2028.

In February 2025, the EC approved, under State aid rules, a €41 million German State aid measure to support Uniper Hydrogen GmbH in producing renewable hydrogen, in Huntorf, Lower Saxony. The project concerns the construction and operation of an electrolyser with a capacity of 30 MW, expected to deliver approximately 2,700 tonnes of renewable hydrogen per year. The project is expected to be completed by 2027. The aid will take the form of a direct grant.

In February 2025, a €100 million subsidy programme was announced and will support the development of green hydrogen projects within the German state of Baden-Württemberg. Electrolyser-based projects built within the state can apply for funding up until May 15, 2025. The maximum funding amount per project is €10 million while small and medium-sized enterprises can secure up to €8.25 million per project. The German Ministry for Environment, Climate and Energy Economy (BMWK) is backing the Funding for Electrolysers (ELY) programme.

In March 2025, the Federal Ministry of Digital and Transport (BMDV) announced funding notices amounting to €154 million to two locations – Chemnitz in the state of Saxony, and the northern German cluster of Bremen, Bremerhaven, Hamburg and Stade – to support the establishment of hydrogen innovation and technology centres (ITZ-H2). The Hydrogen Innovation Center in Chemnitz focuses on supporting the transformation of the supplier industry and mechanical engineering. The Hanseatic Hydrogen Center for Aviation and Maritime in northern Germany focusses on shipping and aviation.

Climate Protection Contracts

In February 2024, the EC approved, under EU State aid rules, a €4 billion German scheme aimed at helping German industry reduce greenhouse gas emissions in their production processes with projects supported ranging from melting tanks for glass production using electricity to the replacement of traditional steel production processes by direct reduction hydrogen-powered plants.

In March 2024, the German Government launched the first bidding process for the Climate Protection Contracts funding programme. Companies in energy-intensive industries that successfully participated in the preparatory process in the summer of 2023 can apply for 15-year funding for major transformation projects. The funding volume amounts to a total of €4 billion.

In October 2024, the German Government handed over the first signed climate protection contracts to 15 German industrial companies with a total value of around €2.8 billion. Of the 15 awarded contracts, five were to companies that plan to decarbonise their production processes with the help of hydrogen. After a preparatory process that began in July 2024, the second-round bidding process was scheduled to begin before the end of 2024.

In March 2025, the EC approved, under EU State aid rules, a €5 billion German scheme aimed at helping German industry reduce carbon dioxide emissions in their production processes with projects supported ranging from fuel switches in the cement and lime sector to electrification in the chemical sector, and the replacement of traditional steel production processes by hydrogen direct reduction processes.

Hydrogen-ready Power Plants

In February 2024, media reports indicated that the German Government had agreed to the construction of 10 GW of ‘hydrogen-ready’ gas-fired power plants, including the (reported) provision of construction subsidies of €16 billion with the subsidies to be sourced from the Climate Transformation Fund. It is reported that the transition from natural gas to 100% hydrogen for these plants is expected to occur between 2035 and 2040.  (Note: In August 2023, media reports indicated that the German Cabinet had agreed to a €212 billion allocation to the Climate and Transformation Fund (KTF) for the period 2024-2027, of which €18.6 billion is allocated to hydrogen industry development.)

In July 2024, the German Government announced a power plant strategy to be implemented within the framework of a Power Plant Safety Act, implementing the agreement reached with the coalition leaders in February 2024 (see above) and agreed with the services of the European Commission. A total of 12.5 GW of power plant capacity and 500 MW of long-term storage is to be tendered via two pillars (with the first tender call expected by end 2024 or early 2025):

  • Pillar I – 5 GW of new hydrogen-ready gas-fired power plants and 2 GW of hydrogen-ready modernisations would be put out to tender (and which must switch to operation on green or blue hydrogen from the 8th year of their commissioning / modernisation). In addition, there are 500 MW of pure hydrogen power plants that are to run immediately on hydrogen and 500 MW of long-term storage.
  • Pillar II – another 5 GW of new gas-fired power plants would be tendered. These are aimed at contributing to security of supply and represent a “bridge” to a comprehensive, technology-open capacity mechanism, which is expected to be operational from 2028.

 

Updated: March 2025