Challenges and Prospects in Germany's Green Hydrogen Industry
Quest One's Hamburg plant employs robotic electrolysers to produce green hydrogen, but demand currently lags behind capacity, resulting in a 20% layoff of German staff this year. Green hydrogen remains costly, and low-emissions hydrogen—comprising less than 1% of global hydrogen production and including green and blue hydrogen—is the focal point of Quest One's ambition to reach a target price of €4 per kilogram to become competitive.
Infrastructure plans in Germany include hydrogen pipelines in northern Germany from Hamburg and salt cavern storage by Storengy Deutschland in Lower Saxony. There are also considerations for storing surplus renewable energy as hydrogen, though such operations are not expected before the 2030s. Proposed international hydrogen transport networks could connect Germany with countries such as India, Saudi Arabia, Chile, and Namibia; however, transporting hydrogen as ammonia to mitigate volume challenges may involve efficiency losses.
The German government supports hydrogen as part of its climate targets but has recently loosened ambitions specifically for green hydrogen. Industry stakeholders emphasize the need for clear policy support and caution against policy gaps that may hinder progress. Competition is significant, with Chinese firms accounting for about 60% of global electrolyser capacity, which affects German producers.
The industry has faced setbacks, including 52 cancelled low-carbon and renewable hydrogen projects over the past 18 months. For example, Statkraft halted new green hydrogen developments in May 2025 due to market uncertainty. Quest One is owned by Everllence, a unit of the Volkswagen Group, though Volkswagen is said to be considering selling Everllence and is reviewing its strategic options.
