Hydrogen Strategy Germany and international positioning: goals and funding programmes


​published on 1st September 2022​


So far, only 5 % of the hydrogen used in Germany is green, i.e. produced by renewable energies1 . However, demand is expected to increase dramatically in the coming decades, as green hydrogen will be central to achieving climate targets. Domestic capacities will only be able to cover up to 14 TWh (15% of demand in 2030). The majority of green hydrogen will therefore be imported. The development of international markets, but also a strong acceleration in the technological expansion in the German market are therefore of high importance in the coming years. The government has already created some funding measures and will support the ramp-up with considerable funds (approx. 9 billion €)2 . These will be made available as part of the National Hydrogen Strategy 2020 and will also be used in part to build up international markets (€2 billion)3.

In the future, hydrogen should be used as a sustainable energy carrier not only in industry (an additional 10 TWh by 2030) but also in transport and in the entire energy system3. The increase in demand up to 2050 is forecast differently, as can be seen below.



Source: German Bundestag elaboration of hydrogen demand4

So far, the transformation to green hydrogen has stalled, especially due to the lack of economic viability compared to grey hydrogen. In order to produce hydrogen 100 % renewably, large RE generation capacities and the associated low electricity production costs abroad are necessary. The German government, together with Japan and South Korea, has so far concluded the most hydrogen partnerships worldwide5 and launched the so-called hydrogen diplomacy.

Hydrogen diplomacy of the Federal Foreign Office

Germany is already cooperating with 23 countries globally in energy partnerships with the primary goals of creating a dialogue on energy policy and providing impetus for joint innovations for the energy transition6. These energy partnerships are now to be expanded to include hydrogen diplomacy, for which the Federal Foreign Office has already created corresponding offices in 3 countries (Nigeria, Angola and Saudi Arabia). Federal Foreign Minister Annalena Baerbock recently planned another one in Kiev7 , but no further progress on this is known so far in connection with the Ukraine war. The function of these offices is to conduct a strategic dialogue with countries in which the international hydrogen market is to be developed. The offices provide knowledge and conduct local analyses regarding the transformation. The most important point, however, is to build up a network of decision-makers and companies from both countries in order to deepen cooperation in the long term8.

The reason why these specific countries were selected lies in the common denominator: land, wind and sun. The African continent in particular is in focus here as a future supplier for Germany. So far, less than 0.02% of the potential of renewable energies is used in Africa (180 TWh in 2018)9. With Angola, it is already planned that the first hydrogen deliveries will take place in 2024 (!), based on the cooperation of German companies and the Angolan energy company Sonagol9 . The biggest challenge of the project is still the transport of the hydrogen. Existing pipelines in North Africa are still used for natural gas, a connection to West Africa will still take time. Therefore, ships will transport the hydrogen to Europe9. There is a mutual dependence on this transformation in Angola as well as in Nigeria, Saudi Arabia and Ukraine. They are all pursuing their own goals of using renewable energies to provide income for their national budgets in the future, as well as meeting their own energy needs cheaply and independently.

A bilateral alliance for hydrogen production and trade was concluded with Australia in 202110. In the same year, a hydrogen partnership was signed with Namibia11 . This resulted in particular from the assessment that the enormous potential for renewable wind and solar power in Namibia could enable best-in-class global prices of €1.50-2 per kg of hydrogen12 . Germany is providing €40 million for the development and plans to play a "central role" in the implementation of the Namibian hydrogen strategy12 .


German funding programmes internationally - H2Global

H2Global is the government's central support to promote or enable the international market ramp-up of hydrogen. In essence, it is a price differential compensation between high production prices and national market prices.

Source: BMWK2

The German government buys hydrogen on the world market (non-EU foreign countries) as cheaply as possible via auctions and resulting 10-year contracts. It then sells it at market prices (cheaper) domestically and in the EU (also via auctions, but short-term contracts)3. The resulting loss is compensated via the H2Global Foundation, which already received €900 million from the hydrogen strategy budget in 20223. Thus, a market for the important energy carrier can already be created now, while the development towards lower production costs runs in parallel and a need for compensation is minimised more and more. For this, not only renewable electricity for electrolysis is essential, but also the creation of a long-term efficient transport infrastructure. In the coming year, four times this amount, €3.6 billion, is expected to flow into H2Global13 . In addition to monetary support from the federal budget, various companies from the gas and energy sector are also donating to the H2Global Foundation14 .

German funding programmes internationally - H2Uppp: up to €200,000 for small and medium-sized enterprises

H2Uppp is a public-private partnership measure that aims to support small and medium-sized enterprises in positioning themselves on the market in developing and emerging countries with green hydrogen technologies. A total of up to € 200,000 in funding is possible, plus intensive advisory services from the Gesellschaft für Internationale Zusammenarbeit (GIZ), which is the programme's public partner. There are various ways to obtain funding, but in essence it is essential to contact the GIZ or the Export Initiative Energy (EIE). Within the framework of the programme, GIZ has hired so-called H2 scouts, who search for eligible projects in selected countries. The GIZ can also be contacted directly as a project partner in this regard15.

The Energy Export Initiative already has structures in place to promote hydrogen projects, which the BMWK uses for H2Uppp. On the one hand, the formation of consortia for renewable energy projects, in which five projects are selected each year purely for hydrogen and receive intensive support in project development as well as access to a professional network. Projects that are selected for this automatically gain the opportunity to be funded via H2Uppp. In addition, EIE offers the so-called Project Development Programme (PEP) for developing and emerging countries, through which qualified projects can also be selected for H2Uppp via contact with the institution. Finally, EIE organises energy business trips to certain target countries in order to get to know the local structures and networks for project development better. Within the framework of these, developed project ideas can also qualify for H2Uppp16.

German funding programmes internationally - promoting measures in the field of exporting green and sustainable (environmental) infrastructure

This funding serves the internationalisation of German environmental technologies and the transfer of know-how to emerging and developing countries. A range of sectors and their technologies are eligible for funding, including green hydrogen. Various project stages from feasibility studies to pilot and initial projects are subsidised with a share of the costs. The amount of funding depends on the individual project; in individual cases, full funding is also possible. All organisations with legal capacity, i.e. clubs, associations, companies, universities and other research institutions, are eligible to apply. In order to qualify for funding, it is particularly important that the projects are subject to a holistic concept. This means that local workers must also be involved and that the infrastructure and knowledge on site must be consciously built up and improved (capacity building).  Services that are necessary for this, such as workshops or training courses, are also funded17 . To apply, a project outline must be submitted, followed by a funding application18 . The funding measure is initially limited until 2023.

All current international funding that relates to the National Hydrogen Strategy can be found on the BMWK website.


On the one hand, the demand for green hydrogen will increase dramatically in the coming decade; on the other hand, there is still a lot of need for action with regard to meeting this demand. The German government is investing billions in the domestic and international market ramp-up, especially in connection with H2Global. Several subsidies exist to provide incentives for German companies to position themselves on the world market with innovative solutions, so that Germany can become a pioneer in the field of hydrogen technology. The biggest challenges are the rapid expansion of large plants that can produce renewable electricity for electrolysis at low cost and the issue of transport. The former should take place internationally in particular, in countries that have a lot of land, solar and wind potential, for example Nigeria. Overall, Germany will only be able to produce a small minority of green hydrogen domestically and will be heavily dependent on imports from international partnerships. Even the planned ramp-up of renewable energies will only be able to cover the additional demand in industry, transport (electromobility) and heating (heat pumps) for the time being. The German government has established diplomatic relations in many places with the specific aim of jointly expanding the hydrogen market and securing mutual supply. The transport issue is to be solved in the international context for the time being with solutions such as shipping, but the long-term goal is a gas network of pipelines extending both through Germany itself and into neighbouring European countries and Africa.

The central role that green hydrogen will play in the future for achieving climate goals has been recognised not only by Germany but globally. Nevertheless, the market and the infrastructure are still in the starting blocks. Within the framework of the national strategy, the technological expansion, also internationally, should now experience a steep development due to the subsidies created.

Funding programmes for hydrogen in the national market also exist and can be viewed here.

As Rödl & Partner, we are already involved in various hydrogen projects with regard to regulatory issues, business cases or financing. We would be happy to advise you!


Potential of green hydrogen: long road to development, short time to implementation - Wirtschaftsdienst

2 BMWK - Green hydrogen

3 National Hydrogen Strategy

4 WD-5-024-22-pdf-data.pdf (bundestag.de)

5 Innovation_Insights_Briefing_-_Hydrogen_on_the_Horizon_-_Ready,_Almost_Set,_Go_-_July_2021.pdf (worldenergy.org)

6 BMWK - Energy partnerships and energy dialogues

7 Germany opens hydrogen office in Kiev - energate messenger+ (energate-messenger.de)

8 Opening of the Hydrogen Diplomacy Office in Saudi Arabia - Auswärtiges Amt (auswaertiges-amt.de)

9 Will Angola become Germany's first African hydrogen supplier? | Africa | DW | 17.06.2022

10 Germany, Australia sign hydrogen accord to boost lower-emissions technology | Reuters

11 One-Stop-Shop - Hydrogen - International Hydrogen Cooperation (bmwk.de)

12 Karliczek: Germany and Namibia conclude hydrogen partnership - BMBF

13 kabinett2023_x (bundesfinanzministerium.de)

14 H2Global Foundation (h2-global.de)

15 Promoting hydrogen projects in developing and emerging countries: H2-Uppp (giz.de)

16 German Energy Solutions - BMWK promotes green hydrogen projects as part of H2Uppp (german-energy-solutions.de)

17 Funding guideline (exportinitiative-umweltschutz.de)

18 Applicants (exportinitiative-umweltschutz.de)




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