Germany and EU Likely to Miss 2030 Green Hydrogen Targets, PwC Study, Says

Germany and EU risk missing 2030 green hydrogen targets due to slow capacity buildup, highlighting the need for political action and subsidies to support this capital-intensive industry's growth.

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Germany and EU Likely to Miss 2030 Green Hydrogen Targets, PwC Study, Says

Germany and EU Likely to Miss 2030 Green Hydrogen Targets, PwC Study, Says

Germany and the European Union are at risk of falling short of their ambitious 2030 green hydrogen targets, according to a recent study by PwC. The report highlights the significant gap between current capacity and the goals set for the end of the decade.

Germany currently has only 0.1 GW of green hydrogen capacity operational, with an additional 0.55 GW financed. This is far below the country's target of 10 GW by 2030. To reach this goal, Germany would need to build 1-2 GW of electrolysis plants and 200-400 wind turbines every year.

The EU aims to use at least 20 million tonnes of clean hydrogen by 2030 and produce half of it within Europe. However, the bloc is also falling behind, with only 0.2 GW of plants currently in operation and 3 GW under construction or financed. To meet its target, the EU would need to build 20 GW of capacity annually.

Why this matters: The slow progress in green hydrogen development could hinder Europe's efforts to decarbonize its energy sector and meet its climate goals. The success of the green hydrogen industry is critical for reducing reliance on fossil fuels and transitioning to a cleaner energy future.

The PwC study cites several barriers to progress in the green hydrogen market. The capital-intensive nature of the industry and the lack of large-volume purchase agreements are significant challenges. Government subsidies are needed to compensate for the additional costs compared to fossil fuel alternatives. The report also notes the "huge gap between announcements and realisation" globally, with only 15 GW of projects financed or under construction out of 840 GW announced.

The development of green hydrogen faces additional complexities, such as the carbon intensity of the grid power used in production, the lack of clear policies and incentives to certify the 'greenness' of hydrogen in many markets, emissions associated with transportation and conversion, and difficulties in ensuring a low-carbon intensity throughout the entire value chain.

In conclusion, the PwC study underscores the urgent need for political action and subsidies to support the growth of the green hydrogen industry in Germany and the EU. Without significant progress in building capacity and addressing the barriers to development, the ambitious 2030 targets for green hydrogen may remain out of reach. As Jörn Steinbeck, a partner at PwC Germany, stated, "The capital-intensive hydrogen market is still in its infancy and has faced challenges such as high interest rates and inflation in material prices." Overcoming these hurdles will be essential for realizing the potential of green hydrogen in Europe's clean energy transition.

Key Takeaways

  • Germany and EU fall short of 2030 green hydrogen targets, with only 0.1 GW and 0.2 GW capacity.
  • Germany needs to build 1-2 GW of electrolysis plants and 200-400 wind turbines annually to meet 10 GW goal.
  • EU aims for 20 MT of clean hydrogen by 2030, but only has 3 GW under construction or financed.
  • Barriers include high costs, lack of purchase agreements, and gap between announcements and realizations.
  • Urgent need for political action and subsidies to support green hydrogen industry growth in Germany and EU.