Germany has committed to achieving greenhouse gas neutrality by 2045 under the Climate Protection Act. Hydrogen is considered an indispensable component of industrial transformation. However, progress from strategy to practical implementation is proving more challenging than expected: projects are progressing slower, investors are holding back, and businesses cannot justify or secure the transition economically or contractually.

What must happen by 2040

The study "Milestones for a Successful Hydrogen Ramp-Up by 2040", produced by r2b energy consulting GmbH on behalf of the German Chamber of Commerce and Industry (DIHK), analyses the current state of hydrogen escalation across the entire value chain – from production through imports and infrastructure to industrial consumption. It combines literature reviews and market data with practical expertise from the network of Industrie- und Handelskammern (IHKs), guided company interviews, and discussions with six foreign trade chambers. The study proposes a concrete action plan with clear milestones up to 2040.

Background

With the change of government and in view of high cost projections, questions regarding technology pathways and supply security have come under scrutiny: alongside green hydrogen, blue hydrogen and imports are increasingly being discussed as complementary options. The planned Hydrogen Core Network – a cross-regional pipeline network – is already well advanced in terms of regulation and planning, but due to a lack of reliable supply and demand signals, it remains largely in limbo and risks being underutilised initially.

Moreover, many potential customers are not located on the core network, making the development of regional distribution networks essential – for which no binding framework currently exists. Large-scale hydrogen storage as system-relevant infrastructure has also been inadequately considered politically and regulatorily, despite particularly long lead times for conversions. On the cost front, the wholesale price of green hydrogen is currently just above eight euros per kilogram – significantly above the level of fossil alternatives. For consumers, network charges, transport, storage, and certification costs further increase overall costs considerably.

DIHK's demands on politics

The study derives specific policy recommendations in three priority levels:

Priority I: Immediate measures by 2030 – Securing the ramp-up

• Reform RFNBO criteria pragmatically: The requirements under Delegated Regulation (European Union) 2023/1184 and the 37th Federal Emission Control Ordinance for electricity consumption for electrolysis are overly restrictive, adding costs without creating ecological value. Suggestions include extending the additionality criterion until 2040, loosening the temporal correlation requirement, and ceasing the disadvantage for directly connected electrolysers.
• Clarify network fee regime for electrolysers: Uncertainty over future network fees blocks investment decisions. Early and legally secure determination by the Federal Network Agency is essential – with incentives for system-friendly behaviour and location-appropriate rules.
• Introduce Book-and-Claim as an interim solution: As long as the physical hydrogen network is not comprehensively available, a robust Book-and-Claim model must enable producers and consumers to trade the regulatory characteristics of hydrogen independently of physical molecule flows – analogous to Europe-wide guarantees of origin for green electricity.
• Secure hydrogen storage as system-relevant infrastructure: The ramp-up of large-scale storage capacities must be initiated politically and regulatorily without delay to avoid missing the long lead times for development.

Priority II: Defining and sustaining the target image – by 2040

• Develop a clear, long-term hydrogen roadmap: Politics must transparently define hydrogen's role in the energy system, its priority applications, and the phased transition from subsidy dependence to a market-driven, coordinated system.
• Establish independent monitoring: Only with traceable monitoring and clear target indicators can market players make investment decisions based on a solid foundation.
• Ensure cross-sectoral coordination: Regulation, core network, distribution networks, storage, import infrastructure, power system, heat supply, natural gas infrastructure, and carbon dioxide infrastructure must be planned as an integrated system – not as isolated individual projects.

Priority III: Bridging to a scaling market – by 2035

• Make distribution network development binding and financially viable: A clear regulatory and financial framework for the development of regional hydrogen distribution networks is essential to ensure that companies away from the core network can receive hydrogen.
• Further develop funding instruments without complicating them: Existing instruments such as two-sided auctions, carbon contracts for difference (CCfDs), and upstream technology funding should be further developed and harmonised without new bureaucratic layers.
• Establish bankability through targeted risk hedging: Specific state risk hedging instruments can help break the mutual waiting game between producers, infrastructure actors, and consumers.
• Use lead markets cautiously and purposefully: Mandatory quota regulations can generate short-term demand but should not be extended past their purpose and should remain focused on applications where hydrogen is structurally indispensable.

FAQ: Questions from a corporate perspective

What is green hydrogen, and why is it still so expensive?

Green hydrogen is produced through electrolysis using renewable electricity. High costs arise mainly due to expensive electrolysers (€2,000–3,000 per kilowatt), high electricity costs from stringent European regulations (so-called RFNBO criteria), and additional expenses for transport, storage, and certification. The wholesale price is currently just above €8 per kilogram – fossil alternatives like natural gas or grey hydrogen remain significantly cheaper in most applications.

When can we expect sufficient hydrogen supply?

According to the study, a reliable, scalable hydrogen market is realistically achievable by the mid-2030s – provided the recommended measures are implemented promptly. Positive developments are already evident: Initial projects are progressing, contracts are in place, and electrolysis capacity is steadily increasing. By 2040, competitive hydrogen prices could be a reality with consistent policymaking. Infrastructure, regulation, and funding instruments must be harmonised and developed in parallel.

What does "RFNBO" mean, and why is it important for companies?

RFNBO stands for "Renewable Fuels of Non-Biological Origin" – including green hydrogen. European regulations specify conditions under which hydrogen is deemed "green" and eligible for funding programmes. These criteria are currently so restrictive that they put German producers at a disadvantage in European competition. The EU Commission announced a prompt review in April 2026.

What must companies do now?

Companies should align their strategic planning for decarbonising production processes with hydrogen – even if implementation is years away. This chiefly involves identifying suitable locations (proximity to the core network or potential distribution networks), applying for relevant funding programmes, and engaging in political consultation processes. The regional Chambers of Commerce and Industry (IHKs) offer guidance on assessing individual circumstances.

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