Hydrogen strategy: Federal Court of Auditors criticises

Hydrogen is stalling despite billions in funding

The implementation of Germany’s hydrogen strategy is proceeding sluggishly. A current special report by the Federal Court of Auditors (Bundesrechnungshof) reveals why the ramp-up of the hydrogen economy is stalling – and what financial and climate-policy risks now loom.

Despite billions in subsidies, the ramp-up of the German hydrogen economy is lagging far behind expectations. As the Federal Court of Auditors states in its special report of 28 October 2025, the federal government is missing key goals of its hydrogen strategy.

“Supply and demand are lagging well behind expectations,” emphasises its president Kay Scheller. This jeopardises not only achieving climate neutrality by 2045 but also the future viability of Germany as an industrial location. At the same time, the Court warns that permanent state funding could put further pressure on the already heavily burdened federal budget.

The ramp-up of the hydrogen economy is stagnating

According to the original plans, a sufficient supply of green hydrogen was to come in equal parts from domestic production and imports by 2030. But according to the report, this goal is out of reach: domestic production is growing too slowly, and the planned import volumes are also falling well short of expectations.

The demand side shows a similar picture. Industry, especially the steel sector, is hardly making use of the existing funding programmes. A decisive impetus is also missing because the construction of gas-fired power plants is no longer necessarily tied to conversion to hydrogen.

Financial risks for the federal budget

In 2024 and 2025, the federal government has already invested more than 7 billion euros in building up the hydrogen economy. Further billions are committed until the end of the decade. Nevertheless, an affordable supply of green hydrogen is not in sight. Green hydrogen remains considerably more expensive than fossil natural gas. To compensate for the price difference, imports alone could cost between 3 and 25 billion euros a year in 2030 – at the expense of the federal budget. Building the hydrogen core network also entails considerable financial risks, as a large part of the costs is pre-financed through state-guaranteed loans.

Climate neutrality and environmental compatibility uncertain

Although green hydrogen is generally regarded as a climate-friendly energy carrier, the Court warns of considerable uncertainties. Especially with imports, there could be high upstream emissions – i.e. CO2 emissions that already arise during production and transport abroad.

The federal government has also relaxed sustainability standards in international tenders in order to receive enough bids. This could further increase ecological risks and call into question the goal of a truly climate-neutral supply.

The Federal Court of Auditors calls for a change of course

The report concludes with a clear appeal: the federal government must subject its hydrogen strategy to a fundamental reality check. It should examine

• whether and when green hydrogen can become competitive at all without permanent subsidies,
• what contribution it can actually make to the energy transition,
• and how supply, demand and infrastructure can be better coordinated in future.

If it becomes apparent that these conditions cannot be met, the federal government should develop a “plan B” – in order to achieve the goal of climate neutrality by 2045 even without a permanently subsidised hydrogen economy.

Publication of the Court of Auditors (German)

Conclusion The Federal Court of Auditors draws a sobering balance

The build-up of the hydrogen economy is proceeding much more slowly than planned, and the risk of expensive permanent subsidies is rising. Without a realistic reassessment, climate targets, industrial interests and federal finances all threaten to come under pressure.

The federal government must act now and fundamentally revise its hydrogen strategy […] Only in this way can it achieve the goal of climate neutrality by 2045 and protect the federal budget from further burdens.

Kay Scheller, President of the Federal Court of Auditors