Researchers have analyzed the future of the hydrogen market in a collaborative project. According to the "HYPAT – H2 Potential Atlas," Germany will need to cover more than 20 percent of its energy demand with hydrogen. High import costs and strategic partnerships will play a decisive role.
The Fraunhofer joint project "HYPAT" investigated the development of the global hydrogen economy. Nine research institutions analyzed the role of green hydrogen in transforming industry, transport, and energy sectors in detail. The project identified potential partner countries for Germany to secure a sustainable supply, assessed global supply and demand potentials for hydrogen and its derivatives, and provided recommendations for import, funding, and cooperation strategies.
Global Hydrogen Demand
A key finding is that the global demand for green hydrogen and its derivatives will increase significantly. According to the final report, global hydrogen demand is projected to account for 4 to 11 percent of the global final energy demand by 2050. The analyses conducted in the project indicate that the global potential supply of green hydrogen is sufficient to meet demand, even considering constraints such as water scarcity.
For Germany, a higher share is expected due to its industrial structure. The demand for hydrogen in Germany is projected to be around 20 percent of the final energy consumption, given the significant role of the steel and chemical sectors.
Since Germany requires a larger share and must import most of the green hydrogen and its derivatives, hydrogen prices are expected to be high. Researchers predict that Germany will likely face the highest hydrogen prices within the EU, posing risks to industrial competitiveness. Import costs for hydrogen are estimated to range between €3.50 and €6.50 per kilogram by 2030 and decrease to €2.50 to €4.50 per kilogram by 2050. Wholesale prices in Germany, however, are expected to remain above €4 per kilogram even in the long term (2050).
Potential Export Countries Identified
The numerous hydrogen exporters offer Germany opportunities to diversify its imports and mitigate risks. Economically, it would be more advantageous to focus on a few supplier countries to achieve economies of scale and avoid high production and transport infrastructure costs.
The researchers identified Morocco, the United Arab Emirates, Canada, Brazil, and Chile as potential export countries. These nations offer favorable conditions for renewable energy and access to capital. The scientists recommend considering not only economic but also social and political factors when selecting partners.
Slow Market Ramp-Up
Currently, the hydrogen market ramp-up is progressing slowly. Multiple uncertainties—such as geopolitical unrest, supply disruptions, uncertain demand levels, and high energy and raw material prices—are preventing necessary investments.
The study forecasts a moderate global need for imports. Global trade is expected to account for only about one-third of total demand between 2030 and 2050.
Germany, along with the Netherlands, Belgium, Italy, Japan, and South Korea, is expected to have significant import needs. Spain, France, Denmark, the United Kingdom, and Poland are positioned to supply EU countries that cannot meet their own demand. A well-developed European hydrogen pipeline infrastructure is thus critical, especially for Germany. A recent Fraunhofer CINES TransHyDE study also demonstrated that a European hydrogen infrastructure is economically viable, even with minimal demand.
Hydrogen Use is Indispensable
The short- and medium-term limited supply means hydrogen use should focus on sectors where there are few or no alternatives. These include steel and basic chemicals, international aviation and shipping, and refineries. For hydrogen to be used in areas like building heating or road transport, prices would need to decrease significantly, which is unlikely in the near term.
Prof. Dr. Martin Wietschel, who coordinated the HYPAT project, concluded: "The project clearly demonstrated that Germany must ensure a stable and sustainable hydrogen supply, especially for its future competitiveness, as hydrogen use is indispensable in certain industrial sectors. Past mistakes, such as one-sided dependencies, should be avoided."
Participating Research Institutions
Under the leadership of Fraunhofer ISI, the study involved the Ruhr University Bochum, Fraunhofer IEG, Fraunhofer ISE, the German Institute of Development and Sustainability (IDOS), Energy Systems Analysis Associates (ESA²) GmbH, the Institute for Advanced Sustainability Studies (IASS), the German Energy Agency (dena), and the German Corporation for International Cooperation (GIZ) GmbH.
