The Federal Audit Office of Germany has sharply criticized the implementation of the national hydrogen strategy and called for a reality check. “Despite billions in subsidies, the federal government is failing to achieve its ambitious targets for ramping up the hydrogen economy,” said the President of the Federal Audit Office, Kay Scheller, on the occasion of the publication of a special report on the implementation of the federal hydrogen strategy. “The responsible Federal Ministry for Economic Affairs has itself recognized that it needs to adjust its approach. Now it must also act consistently.”
According to the report, the federal government has already made available more than 7 billion euros in 2024 and 2025, primarily as subsidies. There are commitments amounting to billions of euros until the end of the decade. The Federal Audit Office sees both the future of Germany as an industrial location and the achievement of climate neutrality by 2045 at risk.
The original demand was expected to come mainly from the steel industry and from hydrogen-ready power plants. For gas-fired power plants, however, the Federal Audit Office no longer expects this, as there is currently no obligation to convert to hydrogen. As supply and demand are both shrinking, the plans for the hydrogen core network are now considered oversized.
At the same time, supply is lacking. Neither domestic supply nor imports are expected to be achievable by 2030 as planned. According to the report, there are so far worldwide investment decisions for the production of 63 TWh of green hydrogen. Germany alone would need between 47.5 and 91 TWh per year.
Because green hydrogen will remain permanently more expensive than fossil energy carriers, the federal government would have to subsidize it with billions every year for the foreseeable future. The report assumes that the price difference between hydrogen and natural gas in 2030 will be between 70 and 275 euros per megawatt hour, including emissions certificates. The financing mechanism for the hydrogen core network is also considered risky. If the ramp-up does not succeed, the federal government would be left with costs amounting to a double-digit billion sum.
Despite the high costs, the contribution of hydrogen to climate neutrality remains uncertain. The Federal Audit Office is now calling on the government to develop supply, demand, and infrastructure “hand in hand.” At the same time, the federal budget must not be overstretched. However, simply waiting is also not an option: “If it cannot find solutions to the existing challenges, it will need a plan B in good time to achieve climate neutrality by 2045 without a permanently subsidized hydrogen economy,” writes the Federal Audit Office.
