“If you want to invest in hydrogen, you should do it here”

In July 2024, the German government ­adopted a national hydrogen import strategy. Why does the country need such a plan?

Raphael Goldstein: Germany wants to become a climate-neutral industrialized country by 2045 and is aiming for a long-term, reliable supply of green hydrogen. The German government currently projects that we will need 95 to 130 terrawatt hours (TWh) of hydrogen and H2 derivatives in 2030 in order to achieve our climate targets, and we will have to import 50 to 70 percent of this. We want to do this within a reliable framework. The strategy concisely explains which instruments Germany will rely on in the coming years to secure the necessary imports.

What are the main instruments?

RG: First of all, the German government wants to strengthen the demand for hydrogen. Funding instruments and incentive systems will be established, and already are in some cases. Germany also wants to promote hydrogen projects abroad where justified. Another important part of the strategy is the development of import infrastructure, for example the designation of corridors for pipelines. The construction of import terminals is being accelerated, and they will be converted to hydrogen and derivative importing terminals. Germany currently relies on various international partners and both bilateral and multilateral forms of cooperation, within Europe and beyond, for the supply of hydrogen and derivatives.

What’s new about this strategy?

RG: The strategy summarizes Germany’s position on hydrogen and addresses all the market players specifically, that is producers, project and infrastructure developers, traders, buyers, but also financial institutions, grid operators and stakeholders in producing countries. The strategy clearly states, for example, that we are also focusing on non-European countries and promoting cooperation. It provides clarification that wasn’t there before.

What does the promotion look like?

RG: Let me give you a example: Fertiglobe is a Dutch–Emirati joint venture that has won a tender and will be supplying hydrogen derivatives from Egypt to Germany from 2027 onward. The tender came from H2Global, a funding program of the German government. The money comes from the German Ministry for Economic Affairs and Climate Action and is managed by a foundation. H2Global buys hydrogen or hydrogen derivatives from other countries through an auction. Then, it resells them in another auction to buyers in Germany using Hint.co. Hint.co, based in Leipzig, is a platform owned by the H2Global Foundation.

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What sorts of business opportunities does that create in Germany?

RG: The strategy means that we need not only suppliers from abroad, but also infrastructure in Germany to store, trade, transport and use all the hydrogen and derivatives. This opens up interesting prospects for market players and for innovative technologies, precisely because the import strategy explicitly includes hydrogen derivatives.

What role do hydrogen derivatives play?

RG: Shipping hydrogen is often preferred over pipelines for long-distance transport due to its flexibility, the existing port infrastructure, and the ability to import from a wider range of international suppliers. At present, derivatives are used as hydrogen carriers because transporting hydrogen in its gaseous or liquid form is technically challenging and not economical. Take ammonia, a derivative that Germany relies on. It’s a raw material for the chemical industry and has been imported for decades, but it’s also a hydrogen carrier. To produce hydrogen from it, however, you need facilities called ammonia crackers, and someone has to build them. That requires larger terminals, larger storage capacities, more traders and larger-­scale logistics. These are investments in the billions that will be made in Germany over the next few years, and now is the time to secure a piece of that pie. Some companies are already doing this: the US industrial gas manufacturer Air Products and fuel trader Mabanaft, for example, are building the first import terminal for green ammonia in the port of Hamburg.

How will the government be supporting these kinds of projects — for example, ports being developed into H2 hubs?

RG: The government has introduced legislation that is designed to accelerate the expansion of hydrogen infrastructure by making it easier to obtain approval for infrastructure projects in Germany. The law is still undergoing parliamentary consultation, but if and when it comes into force, it would definitely be a unique feature. So if you want to invest in the H2 economy, you should do it in Germany.