Germany's hydrogen ramp-up lags climate targets, storage gap looms – industry survey

Companies expect Germany's hydrogen market to grow too slowly to meet the country's climate targets and that storage projects launched so far cannot cover even this reduced demand by 2035, a survey by energy storage operators' association INES has found. Compared with the previous survey in 2024, demand level expectations were pushed back by about five years, according to the market assessment.

INES said the results are "a wake-up call", adding that the expected market development "is not sufficient to achieve the energy and climate targets." The association, which represents companies operating gas and hydrogen storage sites in Germany, urged the government to simultaneously support the hydrogen market and the build-up of storage capacity.

Hydrogen made with renewable electricity is seen as key to cutting emissions in heavy industry such as steel and chemicals, and as a fuel for the backup power plants Germany needs when wind and solar output is low. Large underground storages, mostly in salt caverns, are meant to balance fluctuating supply and demand.

While Germany's government has repeatedly said it wants to ramp up the hydrogen economy, there is a persistent gap between ambition and reality, with high production costs, weak demand, and infrastructure uncertainty continuing to hold back the sector. Despite billions in subsidies, the country is not on track to achieve the goals set out in its hydrogen strategy - and is unlikely to do so in the near future, the Federal Court of Auditors said in a 2025 special report assessing progress and challenges in establishing a hydrogen economy.

“Despite the fact that market growth remains clearly evident, the surveyed market expectations fall short of the long-term scenarios outlined by the economics ministry”, INES said.

Companies taking part in the survey expect to need up to 2.7 terawatt hours (TWh) of hydrogen storage in 2030, rising to up to 7.6 TWh in 2035 and 28.3 TWh in 2045. The upper values also include demand that companies consider less likely, INES said.

Not enough investment has been triggered so far to secure even the more cautious market outlook, INES said, warning that the most urgent need is for the period until 2035 because storage sites take many years to develop.

"Politicians should look at the hydrogen ramp-up and the build-up of storage together," said INES managing director Sebastian Heinermann. "Because of the long development times for storage, the course for supply in 2035 should be set now."

The survey ran from 14 April to 30 June 2026 and was open to companies in Germany and abroad that plan to store hydrogen in the country.