Lower Electricity Prices for Green H2 Production

August 2021

Germany has taken an important step in its multi-billion-euro drive to promote ecologically produced hydrogen as an energy carrier. Under Germany’s Renewable Energy Sources Act (EEG), all businesses in German pay a tax, whose proceeds go toward promoted renewables, on electricity. Producers of so-called green hydrogen will now pay a reduced rate of 15 percent.

The result is a dramatic reduction in expenditures since electricity accounts for up to 70 percent of costs of generating hydrogen. The new rules also allow for further reductions if certain criteria are met.

The government authority responsible for the reform, the Federal Office for Economic Affairs and Export Control, said its goal was to “establish an economic foundation for the electro-chemical production of environmentally friendly hydrogen.” It added that the procedure for applying for reduced EEG rates has been streamlined to make it easier for H2 producers to profit from the new rules.


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