Two years after launch, Germany’s hydrogen core network grows slowly

Germany’s ‘core network’ to connect hydrogen production and consumption centres, as well as storage facilities and import points, is slowly expanding two years after the green light by regulators, data by gas grid operator association FNB Gas showed. Of the planned 9,040 kilometres (km) to be implemented by the 2030s, 537 km are currently in operation, with an additional 900 km planned by the end of 2027, said the organisation. 

A large majority of the pipelines in operation to date are retrofitted existing natural gas pipelines, and more than 500 km of the hydrogen core grid were already implemented last year. FNB Gas said that a key recent milestone is that electrolysis, transport and off-take are operational. In the city of Lingen, an RWE electrolysis plant produces renewable hydrogen, which is transported via around 120 km of pipelines to the chemical park Marl. Germany’s first commercial hydrogen cavern storage facility is due to come into operation in Epe in 2027, the association said. 

Hydrogen produced with renewable energy sources plays a key role in Germany’s plans for a climate neutral energy system of the future. The core network is seen as a prerequisite for the country’s hydrogen economy to emerge. 

The Federal Network Agency (BNetzA) has said that total investment for the hydrogen grid is expected to be around 19 billion euros. Think tank Institute for Energy Economics and Financial Analysis (IEEFA) has warned, however, that demand projections have been overly optimistic, as electrification and cheaper energy sources are likely to limit demand for hydrogen. This would lead to a lack of revenues for operators from transport fees, which could result in billions of euros ultimately paid by taxpayers, due to a state-backed credit scheme used to finance the core grid. 

FNB Gas called for reliable financing conditions, including the continuation and expansion of the government support programme to support industrial decarbonisation through so-called Carbon Contracts for Difference (CCfDs), which also support hydrogen projects. The government announced the preparatory phase for the third round of the programme earlier this week.

While Germany's government repeatedly has 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. The government has faced criticism of funding cuts, and despite billions in subsidies, Germany so far has not achieved 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 in the country.