E.ON’s H2-Bilanz Report Highlights Challenges and Progress in Germany’s Hydrogen Economy

E.ON’s H2-Bilanz Report Highlights Challenges and Progress in Germany’s Hydrogen Economy

(IN BRIEF) E.ON’s latest H2-Bilanz report highlights modest progress in Germany’s hydrogen economy, driven primarily by IPCEI funding, which has increased the share of hydrogen projects under construction or with investment decisions to 9% of the 2030 target capacity. Electrolysis capacity has grown by 68% since February, reaching 111 MW, with larger projects in development. The report also reveals Germany’s potential to import over 60 GW of hydrogen annually by 2032 via pipelines and repurposed LNG terminals, aligning with government goals. However, restrictive regulations and high costs hinder market growth. Hydrogen remains relevant in heavy transport, but fuel cell vehicles lag behind electric cars in mobility adoption. E.ON calls for greater affordability and regulatory support to sustain the sector’s momentum.

(PRESS RELEASE) ESSEN, 2-Dec-2024 — /EuropaWire/ — E.ON has released its latest H2-Bilanz report, offering an in-depth analysis of Germany’s progress in building a hydrogen economy. While public subsidies, particularly from the IPCEI (Important Projects of Common European Interest) program, have spurred new projects and investment decisions, the overall ramp-up remains sluggish. Currently, only 9% of the hydrogen production capacity planned for 2030 is under construction or has secured investment, a modest improvement from 3% earlier this year.

The report, based on data from the Institute of Energy Economics at the University of Cologne (EWI), reveals an increase in planned production capacity, growing from 10.1 GW in February 2024 to 11.3 GW. However, further progress may stall without additional funding programs, as regulatory barriers continue to hinder market development.

Barriers to a Thriving Hydrogen Market

Gabriël Clemens, Managing Director of E.ON Hydrogen, underscored the challenges:
“Switching to hydrogen is essential for many industries to decarbonize, but restrictive definitions of green and low-carbon hydrogen drive up costs unnecessarily. Without affordable options, the market ramp-up will remain limited.”

The report also notes a 68% increase in electrolysis capacity since February, now reaching 111 MW of electrical power, driven by three significant new installations. Larger projects are gaining momentum, with electrolysers exceeding 20 MW already under construction or approved, signaling a potential surge in capacity in the near future.

Hydrogen Imports and Infrastructure

For the first time, the report examines hydrogen import capacity. By 2032, Germany could import over 60 GW of hydrogen annually, supported by planned and existing pipelines, with an additional 100 terawatt hours transported by repurposed LNG terminals. This aligns with the German government’s target of sourcing 50-70% of its hydrogen needs through imports by 2030.

Infrastructure growth is also notable, with the hydrogen core network set to reach 9,040 kilometers by 2032. Additional expansions include 42 kilometers of planned pipelines and 428 kilometers of existing infrastructure, creating a solid foundation for hydrogen transit.

Mobility and Heavy Transport

In mobility, hydrogen-powered fuel cell vehicles continue to decline in popularity compared to electric vehicles, which now dominate the passenger car market. However, in heavy goods transport, hydrogen and electric powertrains coexist, with significant growth observed in hydrogen trucks and tractors.

Looking Ahead

E.ON’s H2-Bilanz underscores the potential of Germany’s hydrogen sector while highlighting critical gaps that need to be addressed. With supportive policies, targeted funding, and infrastructure expansion, the hydrogen economy could play a pivotal role in meeting climate goals and enhancing energy security. However, continued focus on affordability and regulatory clarity is essential to ensure the sector’s sustainable growth.

Media Contact:

Teresa Marie Jäschke
Spokeswoman
tel:+49 151 51030303
teresa.jaeschke@eon.com

SOURCE: E.ON SE