The EWI - Institute of Energy Economics at the University of Cologne has published the H2 Balance 2024. Commissioned by E.on, the report shows that the German hydrogen economy is growing. However, this growth is only happening with state support. Particularly, the IPCEI funding decisions are proving to be important drivers for hydrogen expansion.
The good news first: According to the Eon/EWI study, the quota of projects with a concrete investment decision or already under construction has increased from three to nine percent of the planned production capacity by 2030. This capacity has risen from 10.1 gigawatts in February 2024 to 11.3 gigawatts in November 2024.
IPCEI Projects Give Development a Boost
A significant reason for this is the IPCEI funding decisions issued by the federal and state governments in July for 23 German hydrogen projects. The installed electrolysis capacity increased by 68 percent to 111 megawatts, mainly through three new large-scale facilities. "Rigid rules" in Germany and the EU continue to be responsible for preventing the development of a functioning hydrogen market.
Eon Hydrogen CEO Gabriël Clemens criticized the strict definition of green hydrogen, arguing that it leads to unnecessary price increases. The specifications for carbon-low produced hydrogen are also too restrictive for a successful market launch – a criticism recently formulated by the National Hydrogen Council in a statement.
Clemens said: "For some industries, switching to hydrogen is the only possibility for decarbonization. The very narrow and complicated definition of green hydrogen leads to unnecessary additional costs in electricity procurement and thus higher hydrogen prices. The situation looks no better for the definition of carbon-low produced hydrogen. For these reasons, there is still a lack of affordable offers for industry – and these are urgently needed for a successful market launch."
Core Network Has High Import Potential
For the first time, the EWI also examined the import capacity for hydrogen. The planned core network could import and transport up to 270 terawatt-hours of hydrogen annually by 2032 at 50% capacity. An additional 100 terawatt-hours could be introduced by ship through converted LNG terminals. These capacities would enable the government's goal of an import share of 50 to 70 percent of the projected demand of 95 to 130 terawatt-hours by 2030.
The approved hydrogen core network is set to encompass 9,040 kilometers, supplemented by 42 kilometers of planned and 428 kilometers of existing pipelines. In the mobility sector, a clear trend is emerging: While hydrogen-powered passenger cars are falling behind electric vehicles, hydrogen trucks and tractors are seeing significant increases. In heavy-duty transport, both drive technologies are establishing themselves in parallel.
The Institute of Energy Economics at the University of Cologne (EWI) is an academic research institute for energy economic analyses. Eon SE, headquartered in Essen, is one of Europe's largest energy providers, with around 72,000 employees. Since 2022, its new subsidiary E.ON Hydrogen has been responsible for several hydrogen production and infrastructure projects, including the construction of an electrolyzer in the Essen city port.
