Between Expectation and Reality: How Can the Hydrogen Market Ramp-Up Be Shaped?

The real-world laboratories of the energy transition focusing on sector coupling and hydrogen are testing key technologies for scaling up the hydrogen market at an industrial scale. As a transfer research project, Trans4ReaL brings together experience from five years of real-world laboratory practice and derives concrete courses of action for policymakers, industry and regulators. The findings clearly show why the market ramp-up has so far fallen short of initial expectations.

Over the past five years, important foundations have been laid: a regulatory framework for the production of renewable hydrogen has been established, instruments to support demand (offtake) have been introduced, and initial steps have been taken towards expanding hydrogen infrastructure. Nevertheless, there is still a lack of sufficient economic viability and planning certainty to enable a large-scale roll-out.

• In practice, the production of renewable hydrogen is significantly more expensive than assumed in earlier analyses. Measures to reduce electricity procurement costs as well as investment and capital costs are therefore required.
• Long-term offtake agreements only materialise under an appropriate regulatory framework, as purely market-based willingness to pay remains too low. While willingness to pay can be stimulated in the transport sector through the greenhouse gas quota, the use of hydrogen in industry will not be feasible without additional support instruments.
• Despite pioneering decisions on the development of hydrogen infrastructure, such as the hydrogen core network, uncertainties remain regarding sizing and timely implementation — particularly with regard to hydrogen storage.

These challenges cannot be addressed through a single instrument, but only through a bundle of targeted and complementary measures. The report therefore presents a wide range of possible courses of action addressing different levers across production, offtake and infrastructure. These approaches have been derived from real implementation barriers and close collaboration with the real-world laboratories.