• Image symbolising hydrogen (H2): circles in different sizes, each surrounding the chemical molecular formula of hydrogen, H2

Green hydrogen and Power-to-X products

Global energy consumption is set to grow by 50 per cent by 2050; in developing countries and emerging economies it will increase by as much as 70 per cent. In order to make this growth possible on an environmentally sound and climate-neutral basis, a comprehensive energy transition is needed. So-called green hydrogen plays a key role for that transition. It is climate neutral, can serve to store energy, and can be used in many different ways for fuel production.

Green hydrogen and Power-to-X products – how it works

Using a procedure known as electrolysis, water is decomposed into oxygen and hydrogen. The power needed for this is generated in a climate-neutral manner from renewable energy sources. By adding carbon, for example carbon dioxide (CO₂), the “green” hydrogen that has been produced in this way can then be turned into climate-neutral fuel gas (power-to-gas) or synthetic liquid fuel (power-to-liquid). This technology, which is called “Power to X” (PtX), is considered a key element of an energy system that relies fully on renewable energy sources.

Using green hydrogen and PtX products is a useful option, in particular, in those instances where the use of electricity is difficult, for instance in aviation and maritime shipping. The technology can also be applied in other industries, for instance steel and chemicals.

Green hydrogen and PtX as an economic opportunity for the BMZ's partner countries

The production of green hydrogen and PtX products requires massive amounts of electricity. In order to meet the future demand for climate-neutral fuels, Germany's potential for power production from renewable sources will likely be insufficient. Germany will therefore have to import PtX products on a large scale over the medium to long term.

Making such products will offer countries in the Global South a broad range of opportunities for economic development. The green hydrogen sector fosters the development of local value chains, makes economies more resilient to crises, and creates jobs. Simultaneously, it contributes to energy security and helps countries to make the necessary transition towards sustainable local energy supplies.

That is why the Federal Ministry for Economic Cooperation and Development (BMZ) supports the generation of green hydrogen and the development of related industries in the partner countries with which it engages in development cooperation. The BMZ does not support hydrogen production from fossil energy.

A training class in the ProAndres training centre for the training as solar technician in Santiago de Chile

A training class in the ProAndres training centre for the training as solar technician in Santiago de Chile

A training class in the ProAndres training centre for the training as solar technician in Santiago de Chile

National Hydrogen Strategy – Germany pioneers green hydrogen

Symbolic image hydrogen network

Central website of the German government on hydrogen External link

This website offers information across federal ministries on hydrogen, the National Hydrogen Strategy, and German government support programmes.

Another major challenge for PtX products – in addition to sourcing sufficient renewable energy – is how to develop the market for such products. Improved technology and, in particular, economies of scale in the field of production can help to bring prices down dramatically, thus stimulating greater demand.

This also opens up opportunities for German enterprises. By building and operating “green refineries”, they can become pioneers of hydrogen technology. Through its National Hydrogen Strategy (External link), the German government wants to put Germany at the vanguard of green hydrogen and push ahead with the use of climate-friendly hydrogen technologies. The purpose of the strategy is to foster the production of affordable climate-neutral hydrogen and to make Germany a global provider of state-of-the-art hydrogen technology.

Reference projects are to be launched in selected partner countries for the production of green hydrogen and PtX products in order to increase the market share of these products and support a socially and environmentally sound transformation on the ground.

Solar power plant in a desert

Solar power plant in a desert

Solar power plant in a desert

Development of a PtX supply – BMZ plans to support construction of a reference plant

Under the National Hydrogen Strategy, the BMZ has entered into an alliance with Morocco for the development of the Power-to-X sector. Morocco is one of the pioneers in the renewable energy sector in Africa. In Ouarzazate, one of the world's biggest solar power plants has been built with German support. It provides climate-friendly power for 1.3 million people.

See also
An employee of the solar power plant in Ouarzazate looks over a solar field.
Under the partnership with Morocco, the first step involves the construction of Africa's first industrial-scale plant for green hydrogen and PtX derivatives. The two sides are planning to establish some 100 megawatts in electrolysis capacity. The aim is to show that competitive green hydrogen and/or PtX products can indeed be generated in the partner countries of German development cooperation.

In this project, the BMZ attaches top priority to using the necessary energy and water resources sustainably. Efforts are being undertaken to avoid competition for these resources between the plant and local communities. This is done by expanding sustainable energy supplies, tapping sustainable sources of water, and offering training.

• Diagram consisting of three circles that are linked through one large circle. The top circle is labelled "Development", the bottom left one is labelled "Climate" and the bottom right one is labelled "Economy".

Cooperation with the private sector Green Hydrogen Business Alliance Internal link

The expertise and innovative capacity of the private sector will be needed in order to increase the market share of green hydrogen. That is why the BMZ launched the Green Hydrogen Business Alliance in 2019. The Alliance enables the Ministry to draw on the expertise of European enterprises on green hydrogen and PtX at an early stage in its planning activities. The Alliance is made up of businesses and associations from the various stages of the PtX value chain, ranging from plant engineering, operation and logistics all the way to potential end users.

Other ministries and their activities

The German ministries, each working within their own remit, have joined together to help develop PtX products. The aim is to make them commercially viable as quickly as possible. Initiatives that focus on supply are being coordinated by the BMZ (production of green hydrogen in development cooperation partner countries); those that are concerned with the demand side (developing the market for PtX products in Germany) are mainly being led by the Federal Ministry for Economic Affairs and Climate Action (BMWK), the Federal Ministry for Digital and Transport (BMDV) and the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV). In addition, the Federal Ministry of Education and Research (BMBF) is funding pilot plants and living labs in Germany for research and demonstration purposes, thus fostering mutual learning among various participants in an experimental environment.

As at: 17/04/2023