Germany’s inexperienced hydrogen business is working out of time | EUROtoday

In a spotless, hushed manufacturing unit close to Hamburg in northern Germany, industrial robots stand able to assemble the parts of electrolysers.

These gadgets cut up water into oxygen and hydrogen. The ones manufactured by Quest One use proton trade membranes to perform this.

The robotic arms crafting Quest One’s electrolysers are quicker and extra dependable than the people they’ve changed.

But that velocity and effectivity just isn’t absolutely wanted but, because the order quantity for electrolysers is way under the power’s capability.

The mismatch between provide and demand is clear from Quest One’s personal staffing.

This Hamburg plant can assist virtually double the present employees. But earlier this yr, the corporate needed to lay off 20% of its workforce in Germany.

“The market itself is not picking up organically,” acknowledges Nima Pegemanyfar, Quest One’s government vice chairman for buyer operations. “Demand is the problem. It’s not supply.”

Demand is sluggish partially as a result of inexperienced hydrogen – hydrogen produced by way of electrolysis, utilizing renewable electrical energy – stays dear in comparison with the fossil fuels used to make different kinds of hydrogen.

Low-emissions hydrogen manufacturing makes up lower than 1% of hydrogen manufacturing globally. This consists of each inexperienced hydrogen and gray hydrogen, which is produced from pure gasoline with the ensuing carbon dioxide captured and saved.

Scaling up would assist convey down the prices of inexperienced hydrogen, however many initiatives stay small-scale.

Quest One is hoping that manufacturing of inexperienced hydrogen will ultimately price €4 ($4.60; £3.50) per kilogram – about half of the present worth in Germany, in line with the corporate.

The hole just isn’t solely between provide and demand.

There may be a disconnect between the sectors the place inexperienced hydrogen is most badly wanted (for example, for high-temperature makes use of within the chemical, metal and transport industries) and the use instances which might be much less aggressive, however nonetheless generate chatter.

Christian Stöcker, a communication professor on the Hamburg University of Applied Sciences, is annoyed on the consideration paid to hydrogen for heating buildings and powering automobiles. These can be extraordinarily inefficient, he factors out, compared to warmth pumps and electrification.

Prof Stöcker can also be involved about inexperienced hydrogen’s hyperlinks to fossil gas corporations and automakers. Some critics argue that these corporations have an curiosity to find makes use of for, or justifying, fossil gas infrastructure.

Quest One is a part of the Volkswagen Group, which reportedly is contemplating promoting the corporate it owns (Everllence) that in flip owns Quest One.

Volkswagen wouldn’t verify or deny this to the BBC, or specify whether or not it had some other plans associated to inexperienced hydrogen. A spokesperson states, “We are currently reviewing strategic options for Everllence.”

Making costs extra aggressive will rely on authorities coverage, German inexperienced hydrogen corporations say. Other than regulation supporting this sector, there isn’t any plan B.

And then all of the infrastructure and funding will stand wasted.

That infrastructure features a community of hydrogen pipelines deliberate for northern Germany, snaking out from the Port of Hamburg to numerous hydrogen producers and – it’s hoped – industrial purchasers.

The infrastructure additionally consists of salt caverns to retailer hydrogen underground, which Storengy Deutschland is constructing round an present website for storing pure gasoline in Lower Saxony.

The firm believes that one of the best ways to retailer extra renewable electrical energy is to transform it into hydrogen, retailer it at the very least 1,000 metres underground, then use it in winter when the necessity is biggest.

It’s an extended and expensive course of, and common operations would not begin till the 2030s on the earliest.

Also being deliberate, for better provide, are hydrogen transport networks between Germany and locations as distant as India, Saudi Arabia, Chile and Namibia.

Hydrogen gasoline may be transformed into ammonia after which transported as a liquid. However, there are effectivity losses, together with when extracting the hydrogen on the receiving finish.

There are additionally criticisms of the potential carving up of ecologically or culturally important areas overseas to feed European industries. This may exacerbate the hole in vitality entry between the international locations supplying and consuming hydrogen.

The German authorities has said that hydrogen is critical for reaching local weather targets. But amid excessive prices it’s loosening its ambitions for inexperienced hydrogen.

Yet many inexperienced hydrogen corporations in Germany are calling for extra authorities assist to home industries and vitality stability in competitors with China, the world’s powerhouse of inexperienced hydrogen manufacturing.

Chinese corporations account for nearly 60% of the world’s capability to fabricate electrolysers.

Overall, Ivana Jemelkova, CEO of the business group Hydrogen Council, admits that demand for inexperienced hydrogen just isn’t in step with the very excessive expectations of 5 years in the past.

In the final 18 months, 52 low-carbon and renewable hydrogen initiatives have been cancelled, she says. “That’s a lot of bad news.”

The undertaking cancellations, delays and bankruptcies proceed to mount.

For occasion, in May 2025, the Norwegian renewable vitality firm Statkraft determined to cease growing new inexperienced hydrogen initiatives, on account of market uncertainty. A spokesperson says that the corporate will give attention to fewer applied sciences going ahead.

But “while some of the individual trees may be falling…the forest, as such, is really growing,” Ms Jemelkova believes. “It’s not hype anymore. But it’s not doom and gloom.”

For the German corporations standing prepared to provide, retailer and transfer inexperienced hydrogen, it is now crunch time. They cannot wait any longer for a supportive market, some say.