In one of its final pieces of legislation, the government of Chancellor Angela Merkel sought to polish its uninspiring climate credentials with the surprise announcement in May that it wants to make Germany carbon neutral by 2045 — five years earlier than planned. Apart from the usual underpinnings of a decarbonization plan, like boosting e-mobility, Berlin considers hydrogen to be a central element in the transformation.

Merkel's government presented a National Hydrogen Strategy back in June 2020, claiming to make "climate protection possible in sectors where it's difficult," such as steelmaking, manufacturing, aviation and heavy-duty transport on ships, railways and trucks.

There, carbon neutrality "is possible," said Environment Minister Svenja Schulze as she presented the strategy, "because we perceive 'green hydrogen' to be the solution," — a reference to the German aim of making hydrogen (H2) solely with the help of wind, solar and other renewable energy.

The push to create "a reliable, affordable and sustainable production of hydrogen," and establish "a quality infrastructure for transport and storage," will be supported with initial state funding to the tune of €7 billion ($8.2 billion), and an additional €2 billion earmarked for international partnerships to secure hydrogen imports from abroad.

The government hopes to bring green hydrogen production equipment with a total capacity of 5 gigawatts (GW) into operation by 2030, and an additional 5 GW by 2040. The figure 5 GW, in essence, represents the power of five nuclear reactors combined and equates to the annual energy demand of Lithuania.

Political parties ride the green bandwagon

Little wonder that Germany's Green Party is wholeheartedly embracing the drive toward emission-free hydrogen. Amid growing public concern for a changing climate, the Greens are strong enough to be able to promote the action plan after September's general election, either as junior partner in a coalition, or even at the head of a leftist government alliance.

As the brainchild of the current government of center-left Social Democrats and the CDU/CSU conservative bloc, the green hydrogen plan is unlikely to be dropped if a candidate from those parties calls the shots as the future German chancellor.

Apart from the far-right AfD party, with whom no party wants to liaise, this leaves the pro-business liberal Free Democrats (FDP) as the odd party out of the green hydrogen mainstream in Germany. The FDP has vowed to remain "technology open" when it comes to deciding on where to source Germany's gas. The liberals matter because, as in several previous governments, they could once again become political kingmakers this year.

Green vs. blue, gray and turquoise 

At the moment, almost all of Germany's hydrogen is "gray hydrogen," which means it is produced using fossil hydrocarbons. It's relatively inexpensive, with the price still five times lower when compared with green H2.

Green is the color denoting the most environmentally friendly hydrogen because it's made with renewable energies through electrolysis and entirely free of CO2 emissions. Furthermore, there is "blue hydrogen," which is derived from fossil gas but considered low carbon because it uses carbon capture and storage (CCS) technology to bury the related CO2 emissions underground.

And finally, there's "turquoise hydrogen," which is manufactured using natural gas pyrolysis, a process that creates solid carbon as a byproduct instead of CO2.

Like Germany's liberals, the European Commission has acknowledged all four types of hydrogen are important for achieving carbon neutrality, saying fossil-based H2 with carbon storage is a crucial stepping stone in growing the hydrogen market in its early stages.

German debate heats up

Meanwhile, Germany's green hydrogen road map has unleashed a lively debate among politicians, business and in academia.

Katherina Reiche, a senior executive at energy company e.on, believes that in the next few years "the alternative is not green or blue hydrogen, but blue hydrogen or coal." Reiche made her comments as the chairwoman of the German Hydrogen Council, a panel of 25 experts from business, civil society and environment groups charged by the government with monitoring the national strategy.

In July 2020, Reiche presented a council report that made a strong statement in support of blue hydrogen, stating that green hydrogen alone will not be sufficient to decarbonize German industry, and that limiting the hydrogen market to a single source "will do more harm than good."

Environmental groups, however, have welcomed the government's green focus. Verena Graichen, deputy chairwoman of the BUND environmental NGO told DW that fossil gas-based hydrogen "cannot be on par with green hydrogen" regarding climate protection. Also a member of the Hydrogen Council, Graichen was among the dissenting voices in the report.

Felix Heilmann, a researcher at climate think tank E3G, said in an email to DW the government's recognition that only green hydrogen is sustainable "reduces the long-term risk of fossil gas surviving through the back door."

Mammoth undertaking

Germany's current hydrogen consumption stands at 55 terawatt hours (TWh) annually, and similar to production patterns in the rest of the world, most of it is produced using natural gas.

According to expert assessments the planned 5 GW production boost by 2030 will increase annual German hydrogen output by only 14 TWh. By that time, though, overall hydrogen demand is estimated to rise to between 90-110 TWh, according to government figures.

Systems analysts Olivier Guillon and Holger Hanselka have been modeling future hydrogen demand and related infrastructures for the German Helmholtz Association. In an interview published on the research organization's website, they said that ideally "about half of this [demand]" could be produced from domestic solar and wind power, but even for that, renewable-electricity production "will have to quadruple" over the next decade.

Despite its stated policy, the government seems aware of the limits to its hydrogen plan and is striving to establish import partnerships with countries in Northern Europe with lots of wind, and solar power producers from Spain to North Africa. A so-called "atlas of potentials" is being developed to find regions best suited for producing and exporting hydrogen.

German industry is hoping to seize the momentum behind the hydrogen drive and has launched more than 60 projects worth about €20 billion to benefit from the promised state funding. But the head of the Federation of German Industries (BDI), Siegfried Russwurm, also found it necessary to recently warn that those investments wouldn't be made "on the off chance."

"We need a business case … and we need guarantees that potential new plants will have enough hydrogen supplies to operate. If that's not ensured today, there won't be any investments made tomorrow," Russwurm told German radio station Deutschlandfunk in July.