Germany's hydrogen strategy requires overhaul to meet 2030 targets, audit office warns

BERLIN (Reuters) -Germany's federal audit office said on Tuesday that the nation's hydrogen strategy is falling short of its objectives, calling for a course correction to avoid missing 2030 targets for domestic green hydrogen production.

"It's time for a reality check," audit office president Kay Scheller said in the report, highlighting that both supply and demand for hydrogen, particularly in the steel sector, remain far below expectations despite billions of euros in subsidies.

Without adjustments, Germany will miss its 2030 targets for domestic green hydrogen production, and imports would be insufficient to bridge the gap, the audit office said.

It also raised concerns over the high cost of green hydrogen, noting that permanent subsidies could place unsustainable pressure on the federal budget. Import-related expenses alone could amount to between 3 billion and 25 billion euros by 2030, it said.

Hydrogen, produced through electrolysis of water using renewable electricity, is seen as a key driver in transitioning to a lower-carbon economy.

(Reporting by Holger Hansen, Writing by Friederike Heine, editing by Kirsti Knolle)