Green hydrogen

Solar plant Solar Jama in the Atacama Desert in Chile


Federal Minister for Development Gerd Müller

"Climate change has long become the determining issue for human survival. We need a global energy transition if we are to successfully meet the challenge. That means making the quantum leap to CO2-neutral, synthetic fuels"

Minister Gerd Müller

Green hydrogen and power-to-x products

Green hydrogen will play a vital role in the efforts to accomplish a successful energy transition and achieve international climate goals. It can be used to produce not only climate-neutral liquid fuel but also fuel gas. That makes green hydrogen a key commodity in a successful energy transition.

How it works

Using a procedure known as power-to-x (PtX), sustainably generated electricity is used to make hydrogen out of water. To that is then added carbon dioxide (CO2) from the air. The result is climate-neutral synthetic liquid fuel (power-to-liquid) or fuel gas (power-to-gas). In instances where it is difficult to use electrical energy, these green PtX products provide a good way of reducing carbon emissions. Synthetic kerosene can be used for aviation, for example, and synthetic diesel for container ships. The technology can also be applied in other emission-intensive areas, like the steel and chemical industries.

Wind farm in the Atacama Desert, Chile

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

Producing green hydrogen and its derivative products requires massive amounts of electricity from renewable sources. Germany does not currently have enough renewable energy to produce all the synthetic liquid fuel and fuel gas it will need in future. That is why it is investing in the production of green PtX products in partner countries that have sun and wind in abundance.

The Federal Ministry for Economic Cooperation and Development (BMZ) sees green hydrogen as offering a great opportunity for Germany's partners in development cooperation. The wind and solar power available in those countries can be used to produce sustainable hydrogen and its derivative products. For the partner countries, that would mean more skilled jobs, higher export revenues and an improved local energy supply.


National hydrogen strategy – Germany pioneers green hydrogen

Another challenge to be faced – in addition to sourcing sufficient renewable energy – is how to develop the market for PtX products. Since PtX products cost more to produce than the fossil-based alternatives, synthetic liquid and gas fuels are not yet economically competitive. However, improved technology, economies of scale and smart regulation could all help to bring those costs down dramatically, stimulating greater demand.

There are great opportunities to be had here for German businesses. They can use the skills they have to build and operate "green refineries" and become pioneers of hydrogen technology. Before the end of 2020, the German government plans to publish a national hydrogen strategy and action plan, outlining how to seize this opportunity for industry and put Germany at the vanguard of green hydrogen.

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

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

Under the national hydrogen strategy, the German Development Ministry (BMZ) plans to establish a PtX reference plant in North Africa so as to secure the supply of the products required. The aim is to show that PtX products can indeed be generated in the partner countries of German development cooperation in a commercially viable way. One point of vital importance to the BMZ is that the energy and water resources required be sourced sustainably; any conflict with the surrounding community over the use of resources must also be avoided. That is why work on the plant will also be accompanied by measures to expand the energy supply, identify sustainable sources of water and offer training.

Business alliance on energy

The expertise and innovative drive of the private sector will be required for the building of the reference plant. With a view to integrating the technology and skills of German businesses into plans for the reference plant at an early stage, the BMZ created a business alliance on energy in 2019. The alliance is made up of businesses and associations from the various stages of the green hydrogen and PtX products value chain, ranging from the energy sector to the construction trade. The alliance's goal is to establish a consortium for building the reference plant. The first step will be to conduct a market study and develop business scenarios. The BMZ is meeting regularly with the businesses concerned.

Other ministries and their activities

The German ministries, each working within their own remit, have joined together to help develop green hydrogen 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 the 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 Energy (BMWi), the Federal Ministry of Transport and Digital Infrastructure (BMVI) and the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). The Federal Ministry of Education and Research is also funding pilot plants and living labs in Germany for research and demonstration purposes.

Under its Power-to-X Action Programme the BMU plans to establish a Power-to-X Secretariat for launching demonstration projects in partner countries, for example, and sharing knowledge through an international power-to-x network.

The BMBF is also putting together a "green hydrogen atlas", identifying where the opportunities for sustainable development of the technology in Africa lie.

Solar plant in the desert


Tobias Lechtenfeld
Unit 110: Cooperation with the private sector and sustainable economic development

Documents and links

Further information

BMZ glossary

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