's National Hydrogen Strategy calls for at least 10 GW of domestic electrolysis capacity by 2030. However, by October 2025, Germany had commissioned only about 0.2 GW of electrolysis capacity. Hanna Schumacher, head of the Hydrogen Division at the Federal Ministry for Economic Affairs and Energy, confirmed the shift away from the electrolysis expansion target on July 8 at an event hosted by the German Chamber of Industry and Commerce.
Despite falling short of its target, the federal government is sticking with other measures and making adjustments to them .The Federal Network Agency has already approved the core hydrogen network by the end of 2024 .To ensure that the implementation of this approved network does not fail due to protracted follow-up procedures, the federal government has enacted the Hydrogen Acceleration Act to shorten additional approval procedures.
The federal government is also charting a new course at the institutional level. On July 9, it appointed new members to the National Hydrogen Council, giving it a stronger focus on business expertise. This realignment comes in the same week as the government’s distancing from the expansion target and demonstrates that the retreat from the electrolysis target does not signify a retreat from hydrogen policy as a whole, but rather a course correction. Hydrogen continues to be viewed as a market of the future with industrial potential.
The chicken-and-egg problem is slowing down the market's ramp-up
Generation, infrastructure, storage, transmission, and consumption already exist to some extent in Europe, but they are not yet economically integrated. Stable price signals, long-term purchase agreements, and reliable support mechanisms are lacking in many places. This creates a chicken-and-egg problem: without a sufficient, affordable supply, demand lags behind; without major buyers, there is no incentive to produce.
In October 2025, the Federal Audit Office criticized the federal government for failing to meet the goals of its hydrogen strategy despite billions in funding. It highlighted risks to climate neutrality, Germany’s position as an industrial hub, and the stability of federal finances. The geopolitical context increases the urgency for action: Energy crises in recent years have exposed Europe’s dependence on imported fossil fuels. Hydrogen can reduce this dependence, diversify supply sources, and enable seasonal energy storage.
“The hydrogen market is not currently failing because of the technology. It is failing because of a lack of and inconsistent regulatory frameworks, ”said Dr. Timm Kehler, managing director of the industry association Die Gas- und Wasserstoffwirtschaft.“As long as hydrogen issocially beneficial but commercially unattractive, there will be no functioning market.”
The solar industry serves as a cautionary example
The German solar industry illustrates how an inconsistent subsidy policy can destroy a market. In the early 2000s, Germany led the global photovoltaic market; today, China holds market shares of over 80 percent across all stages of the value chain. The 2012 amendment to the Renewable Energy Sources Act (EEG) reduced the feed-in tariff and capped subsidies at 52 GW of installed capacity. The PV market volume plummeted by about 90 percent from 2012 to 2014, and the number of employees in the industry fell from about 120,000 to 50,000 during the same period. Industry revenue declined by 74.2 percent between 2011 and 2014.
“It took the solar industry 20 years to get to where it is today. The hydrogen economy has only existed as a serious political initiative for the past 5 to 6 years, ”notes Uwe Kerkmann, CEO of H2UB in Essen.
New Law Makes Gas-Fired Power Plants Anchor Customers
With the Electricity Supply Security and Capacity Act, the Bundestag and Bundesrat adopted a tender framework for 11 GW of power plant capacity in July 2026 . By 2045, at least 4 GW of power plant capacity is to be converted to hydrogen. Section 17 of the Act mandates H₂ readiness as a requirement for all long-term capacities. Certain gas-fired power plants must therefore be designed from the outset for future hydrogen operation and will thus become potential anchor customers in the hydrogen market.
The initial maximum subsidy amount was set at 173,000 euros per MW. On July 6, 2026, the federal government raised this amount to 244,000 euros per MW. Whether this statutory requirement will actually lead to investments depends on whether the transition to hydrogen is closely synchronized with the ramp-up of the nuclear power grid.
Start-up Ecosystem Grows Despite Political Uncertainty
According to Kerkmann, the startup scene in the hydrogen sector is relatively stable. It is growing slowly but steadily. The H2UB platform in Essen lists around 170 startups across the entire hydrogen value chain in Germany; across Europe, the ecosystem comprises about 600 startups. According to Kerkmann, these startups have weathered the hype well. Nevertheless, it remains to be seen which of these companies will make the leap from the pilot phase to industrial-scale production as long as demand for green hydrogen continues to develop only slowly. According to Kerkmann, the focus is now on those ideas and projects that have a realistic chance of success—that is, those with a higher Technology Readiness Level.
Within the value chain, the focus is increasingly shifting from production to off-take and utilization. There remains a gap between established prices for fossil fuels and prices for green hydrogen, which makes it difficult to establish reliable off-take structures.
Startups help shape the path to a business case
The example of Greenlyte Carbon Technologies shows how companies can attract customers early on despite this discrepancy. Founded in 2022, the Essen-based startup has developed LiquidSolar, a technology that captures CO₂ from the air while simultaneously producing hydrogen.
“We developedthe business case together with our customers, ” says Florian Hildebrand, CEO of Greenlyte Carbon Technologies, describing his company’s approach.
Instead of entering into discussions with potential customers by promising specific prices, Greenlyte worked with an Industry Advisory Board—which included representatives from Lufthansa, TUI, and Uniper, among others —to develop the purchasing criteria from the customers’ perspective.
In a market without established price signals, without reliable demand structures, and without a common language for assessing risk, companies must actively build trust. Communication thus becomes a strategic factor for success and a prerequisite for bankability, off-take agreements, and political support.
Six Recommendations for Communication
Based on the expert interviews, the CC Collective identifies six areas of action for hydrogen companies’ communications in its white paper. These are intended to help turn technological maturity into economic viability.
- Highlighting the Business Case
- Using Advisory Boards Strategically
- Understand external stakeholders and involve them early on
- Using Resilience and Cost-Effectiveness as Arguments
- Demand Political Reliability
- Thinking of Communication as a Marketing Tool
Read the full white paper
