Germany will earmark up to 3.53 billion euros (USD 3.82 billion) of public funds to procure green hydrogen and its derivatives between 2027 and 2036, the economy ministry said on Tuesday, as Berlin bets on the climate neutral fuel to decarbonize Europe’s biggest economy.
“The aim of the funding measure is to bring together supply and demand, both in terms of quantities and prices,” the ministry said in a statement, adding that money will come from the government’s Climate and Transformation Fund.
Germany is seeking to expand reliance on hydrogen as a future energy source to cut greenhouse emissions for highly polluting industrial sectors that cannot be electrified such as steel and chemicals and cut dependency on imported fossil fuel.
Berlin will have to import up to 70% of its hydrogen demand in the future as Europe’s largest economy aims to become climate-neutral by 2045, according to the government’s hydrogen updated government strategy published last summer.
The earmarked funds will be used to compensate for the difference between supply and demand prices, the ministry said, adding that it was discussing the details of the use the new funding with the European Commission.
In an effort to speed up the global market ramp-up of green hydrogen and boost investments, the government launched the H2Global project in 2021 by using a “double auction”. Under the scheme, hydrogen or hydrogen derivatives are bought cheaply on the world market and sold to the highest bidder.
