Green Hydrogen for the Energy Transition in Germany - Potentials, Limits, and Priorities

This paper explores the potentials, limits, and prioritization of green hydrogen deployment in Germany across the sectors: industry, buildings, electricity production, district heating, and transport. Green hydrogen offers a unique opportunity to decarbonize hard-to-abate sectors such as steel, copper, and chemical industries. On the other hand, the deployment is limited by the efficiency, which leads to high demand of renewable electricity and high costs. The paper discusses the two opposing trends in green hydrogen setting sector priorities. While efficiency considerations suggest prioritizing the industrial sector, market competitiveness is likely to be achieved in the transport sector first, and the industrial sector last. The paper concludes by emphasizing the need for strategic planning and policy support to optimize the deployment of green hydrogen across these sectors, balancing efficiency considerations with market dynamics. It also highlights the importance of continued research and investment in green hydrogen technologies to reduce costs and enhance performance. This paper was developed within the project NRL (Northern German Living Lab) which is partly funded by the German Federal Ministry for Economic Affairs and Climate Action (BMWK).