The UK and Germany have announced an agreement that is aimed at developing the international hydrogen industry.

The UK has pledged capital from the £240 million Net Zero Hydrogen Fund to invest in low-carbon hydrogen production with a view to develop renewable hydrogen technologies. In turn, diversifying away from costly and environmentally damaging fossil fuel production. In partnership, Germany has agreed to propel the hydrogen industry by implementing a National Hydrogen Strategy. This will also aid both countries in their attempts to be net zero by 2050.

The partnership aims to encourage domestic energy security, meanwhile spearheading international efforts to promote international trade and attract private investment. The use of renewable hydrogen as an alternative, clean energy source is still in its infancy stage. However, by setting important safety standards to allow for international trade and stable markets, the partnership hopes that hydrogen technologies and projects will attract private investment.

The partnership is also a response to a geopolitical challenge that Germany faces. The Russian invasion of Ukraine has prompted Germany to act in order to better secure its energy supply, through the importation of hydrogen. Following the invasion, Germany lost its gas supply from Russia. Natural gas makes up approximately 27% of Germany’s energy mix; 55% of this natural gas was imported from Russia. This has made the partnership all the more necessary, and beneficial for both Germany’s domestic energy supply and the wider development of hydrogen technologies.

The use of hydrogen does not come without its financial costs or practical challenges. The affordability of hydrogen as a clean energy resource remains an issue; attracting private investment is something that can help solve this problem. Nevertheless, this agreement is promising and lays the foundations for development in the hydrogen industry. But it remains to be seen whether the promises, targets and intentions of the partnership come into fruition.

Article by William Martin

William Martin is presently pursuing his degree at Exeter University. He’s interning at Prospect Law, offering valuable support to the legal team.

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