RWE Position Paper Outlines Economic Hydrogen Scale-Up in Germany

In a recent position paper, energy company RWE presented a roadmap for a competitive expansion of the hydrogen economy in Germany. RWE highlights an expected price of around €11 per kilogram for green hydrogen by 2030. This is significantly higher than the cost of grey hydrogen, which RWE estimates at approximately €3 per kilogram. As a result, green hydrogen would not be competitive under current conditions.

At the same time, the company sees progress in the market. Early investment decisions and contracts indicate that the scale-up has already begun. This includes a long-term supply agreement between RWE and TotalEnergies for 30,000 tons of green hydrogen annually, sourced from the planned electrolysis plant in Lingen for delivery to the refinery in Leuna. In parallel, infrastructure is also expanding: initial sections of the national hydrogen backbone network have been converted from natural gas to hydrogen.

To close the cost gap between green and grey hydrogen, RWE identifies two key levers. At the European level, regulatory adjustments are needed, particularly the removal of overly restrictive criteria for green hydrogen (“RFNBO”) in the Delegated Act. At the national level, RWE calls for an extension of exemptions from electricity grid fees and surcharges for electrolysers beyond 2030, as well as reforms to electricity access and pricing rules to better utilize flexibility options. According to the company, such measures could reduce the cost of green hydrogen to below €6 per kilogram.

In addition to lower costs, RWE sees stable demand as another key factor for the scale-up. Demand could be boosted particularly in the transport sector and in refineries, for example through quotas for renewable fuels. Technological advances in electrolysis are also necessary. More efficient plants could reduce investment and operating costs, and a government-supported research and development program would accelerate market readiness for new technologies and reduce dependence on import systems.

The position paper concludes that the scale-up of Germany’s hydrogen economy is based on a solid foundation. With adapted regulation and reliable demand signals, green hydrogen could become economically competitive.