Germany’s Federal Ministry for Economic Affairs and Energy (BMWE) has introduced a package of 10 measures aimed at accelerating the development of the country’s hydrogen market (BMWE press release, 19/10/2026). “The development of the hydrogen market is currently facing major challenges and is being delayed, especially since production costs are still significantly higher than the willingness to pay of many potential application sectors” said the Ministry.
To address these barriers, the government will provide EUR1.5bn in funding through carbon contracts for difference (CCfDs). These agreements compensate companies for the additional costs incurred when transitioning to climate-friendly production processes. The funding envelope could be increased if demand is strong during the preliminary stages of the bidding round. Hydrogen projects will also be eligible for CCfD support beyond the dedicated hydrogen funding window. According to the Ministry’s document, the government draft provides for up to EUR8.7bn in commitment authorisations to finance CCfDs supporting various CO₂ reduction technologies, including hydrogen, through to 2050.
The BMWE also plans to incentivise the conversion of power plants to hydrogen by supporting the technical retrofitting of 4 GW of generating capacity. This includes 2 GW to be tendered in 2027, with hydrogen use scheduled to begin in 2040, followed by a further 2 GW to be tendered between 2030 and 2032, with conversion planned from 2043.
Regarding transmission infrastructure, EUR4.2bn in public funding will be made available over the coming years to expand the network. More than 500 km of the core hydrogen pipeline network was operational in 2025, while an additional 2,200 km is currently under construction.
Finally, the BMWE intends to establish a lead market for low-emission steel for the first time. Under the Offshore Wind Energy Act (WindSeeG), offshore wind turbines must use steel produced with renewable or low-carbon hydrogen. According to the Ministry, this requirement is designed to stimulate hydrogen demand and support the development of the market.
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