Rethinking Germany's hydrogen-led transition  /  Chapter 3

Recommendations

Germany’s hydrogen strategy is built around infrastructure deployed ahead of demand. That infrastructure only makes sense if hydrogen achieves system-wide relevance. Where demand falls short, the financing architecture automatically transfers a growing share of costs onto the public balance sheet. The central policy challenge is therefore how to respond to weak utilisation, before that transfer occurs. It is better to recognise infrastructure risk early than to continually expand public subsidies to protect it. The recommendations below therefore focus on two priorities: avoiding policy that expands hydrogen demand primarily to defend infrastructure commitments, and ensuring the scale of infrastructure exposure is calibrated for a rollout led by genuine demand.