Goals and paths to the hydrogen economy 2030/2050

Germany aims to have a climate-neutral economy by 2045 at the latest. The German government set this target with their 2021 amendment of the Federal Climate Change Act. Hydrogen will have an important role to play in achieving this goal. Produced from renewable energies, it offers energy- and emissions-intensive sectors a path to a climate-neutral future. At the same time, hydrogen opens up new growth opportunities for the German industry and economy.

To enable German policymakers to set the framework for a sustainable, successful hydrogen economy, our H2-Compass project is working out development paths and options for action as the basis for a national hydrogen roadmap. With this goal, we sought to learn how stakeholders from business, academia, public administration and civil society envision the German hydrogen economy in the years 2030 and 2050. The online, anonymous stakeholder survey took place in autumn 2021.

The full results of the survey are available here for download (in German only).

You can also download a brief dossier of survey results on enabling and hindering factors as well as on measures for promoting the acceptability of hydrogen (technologies). Currently, the dossier is downloadable in German only – however, its contents can be viewed in English on this page. Scroll down for more!

Competitiveness and coordination

The public debate on the significance of guarantees of origin for energy production, e.g. in the EU taxonomy, is reflected in the survey results. We asked the survey participants to rate how necessary factors for promoting economic competitiveness and strategic nationwide coordination are, using a five-point scale. Guarantees of origin for climate-neutral and low-carbon hydrogen received the most ratings of ‘necessary’ or ‘somewhat necessary’ (83 percent of the respondents, see Figure 3). Other structural measures, such as changes to or exemption from the state-induced components of the electricity price (SIP) for hydrogen production (79 percent) or state grants and loans for hydrogen projects (77 percent), are also supported by a large proportion of the participants.

While almost two thirds of the participants (63 percent) consider a CO₂ price of 100 euros per tonne to be ‘necessary’ or ‘somewhat necessary’ (see Figure 3), only slightly more than one third of the respondents see this as the case for a CO₂ price of over 300 euros per tonne. However, even fewer of the respondents (25 percent) consider the higher CO₂ price to be ‘unnecessary’ or ‘somewhat unnecessary’.

The shares of respondents who are neutral towards the structural support of hydrogen purchase agreements (HPAs) (24 percent) or consider it only somewhat necessary (34 percent) rather than necessary are also comparatively large. This is interesting, since other structural support measures were considered necessary by a much larger proportion of respondents.

Figures 4 and 5 show how urgent the respondents consider the implementation of the measures. (Only participants who had rated the measure as neutral, ‘somewhat necessary’ or ‘necessary’ received this follow-up question.) Figure 4 shows the measures for which at least three quarters of the participants consider implementation necessary by 2025, at the latest. In addition to the four measures most considered necessary in the previous step, two others are considered both very necessary and urgent: OPEX funding that goes beyond CAPEX funding and a CO₂ price of at least 100 euros per tonne.

At least half of the respondents from public administration and large enterprises expect even faster implementation of two measures: From the point of view of these sub-groups, the implementation of guarantees of origin (Figure 4c) and OPEX subsidies going beyond CAPEX funding (Figure 4d) should take place as early as 2022.

All measures are expected to be implemented by 2030 at the latest (Figure 5), although the degree of support for this or earlier years varies considerably. The introduction of a CO₂ price of at least 300 euros per tonne by 2030 is considered necessary by only 66 percent of respondents, while complete decarbonisation must be achieved by 2030 according to 57 percent. In the case of all other measures, at least 79 percent see the need to complete them by 2030. The opinions on the urgency of structural support for HPAs are interesting, similarly to those on their necessity. There is a clear difference in the assessment of the urgency of HPAs between respondents from public administration (82 percent of this subgroup expect implementation by 2025 at the latest) and academia (only 49 percent of participating researchers favour this time horizon).

Obstacles and hurdles

Renewable electricity is the bottleneck: 59 percent of respondents see limited availability of land for renewable energy generation as one of the four greatest obstacles to the large-scale, climate-neutral production of hydrogen in Germany (Figure 6a). However, the lack of infrastructure for the distribution of hydrogen and an insufficient number of electrolysers are also seen as major obstacles by more than a third and a quarter of respondents, respectively.

Only 6 percent of respondents consider a lack of skilled personnel to be one of the hydrogen economy’s top four hurdles. Interestingly, however, we saw in Figures 1 and 2 that a large majority of respondents (over two thirds) see education and training as both necessary and to be implemented immediately or by 2025. Especially given the current general lack of qualified personnel, this could be a future bottleneck.

Economic issues should not be underestimated either. Respondents were asked to select the most important four obstacles from the following categories: availability; research and development; economic viability and governance. 72 percent of the participants chose at least one hurdle from the economic viability category. Low cost-effectiveness due to investment and maintenance costs is clearly seen as the most important obstacle in this group, while low cost-effectiveness due to low efficiency and long investment cycles were only chosen as a notable obstacle by around ten percent of participants (Figure 6b).

More than half of the participants (57 percent) see considerable obstacles in the field of governance, especially the lack of a legal framework for guaranteeing business models in the depreciation period (see Figure 6c). Here, too, the three possible answers in the category were selected by at least 10 percent of participants. In contrast, only two of the obstacles in the Research and Development (R&D) category were selected by at least ten percent of the participants (see Figure 6d).

Factors influencing hydrogen acceptability

The importance of renewable energies and renewable energy expansion for the successful development of a hydrogen economy in Germany is underlined by the results of a two-part question on the acceptability of hydrogen. We asked participants to rate factors influencing the public acceptability of hydrogen using a five-point scale (Figure 7). 91 percent of participants see measures to increase the acceptability of renewable energy expansion as ‘necessary’ or ‘somewhat necessary’ (black and dark green bars), with 77 percent of participants considering such measures to be unconditionally necessary (black bar).

Some participants also see the need to increase the acceptability of measures that are politically controversial in Germany. These include, for example, the use of carbon capture and storage (CCS) for hydrogen production via steam reforming (rated as (somewhat) necessary by 47 percent of respondents, see Figure 7), the use of imported hydrogen produced with nuclear power (30 percent) and the use of hydrogen generated from fossil fuels (27 percent). These views could indicate that the respondents see a large gap between the demand for hydrogen and the expected availability of hydrogen from renewable sources, at least for the time being.

Not only necessity, but also urgency are key when it comes to increasing acceptability: In the opinion of almost all participants (95 percent), measures to increase the acceptability of a continued renewable energy expansion should be initiated as soon as possible (Figure 8a).

When introducing new technologies, public acceptability is important. This is often influenced by safety issues - an opinion shared by the participants: 93 percent of respondents see a need for safety-focused measures to gain in acceptability by 2025 - 76 percent already by 2022 (Figure 8b). The widespread use of hydrogen also requires large-scale infrastructure. Respondents see an urgent need to increase acceptability regarding this aspect, although the time horizon here is somewhat more generous: As many as 41 percent are of the opinion that increasing the acceptability of this innovation can wait until at least 2025 (see Figure 8c).