Germany’s green hydrogen industry is facing a critical slowdown, with production capacity outpacing weak demand, according to the BBC report. In Hamburg, hydrogen equipment manufacturers have been forced to lay off staff due to underutilized factories. While green hydrogen (produced with renewable energy) is central to Germany’s decarbonization goals, its cost — currently about €8/kg — is nearly double the level needed for competitiveness.
Misalignment between potential use cases and actual market demand
Heavy industries such as steel, chemicals, and shipping are prime users, but attention often drifts to less viable applications like heating and vehicles.
Germany’s industrial players and policy leaders are urging stronger government incentives, especially as China now controls around 60% of global electrolyser production capacity and is driving down costs.
Timing is Key to Global Energy Buyers & Suppliers
For global buyers and suppliers, the key insight is timing: hydrogen supply chains, infrastructure (pipelines, storage caverns, and import links), and partnerships are being built, but market uptake remains uncertain until support policies stabilize.
Suppliers able to offer cost reductions, flexible financing, or partnerships in scaling infrastructure may gain advantage, while buyers should monitor EU and German regulatory shifts that could rapidly reignite growth. After all, as stated by the German government, hydrogen is still necessary for reaching climate targets.
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