German green hydrogen transport mandates set to become law

Germany is set to formally adopt green hydrogen mandates in transport after its upper house raised no objections to a bill recently passed through parliament.

The Bundesrat waved through the bill that will see green hydrogen mandated to make up 10% of transport energy by 2040.

It also includes a penalty of €120 per gigajoule for fuel suppliers that fail to meet the obligation.

It implements targets under the EU’s Renewable Energy Directive III, which requires hydrogen to make up 1% of transport energy by 2030.

Under the German law, renewable fuels of non-biological origin (RFNBOs) like green hydrogen and e-fuels would need to make up 0.1% of transport energy, growing to 1.2% in 2030, and 10% in 2040.

The law has now effectively cleared the political process, with only formal constitutional and administrative completion remaining before it fully enters into force.

Luc Graré, CEO of French firm Lhyfe, said the sign-off is expected to generate demand for around 19,000 tonnes of RFNBO-compliant hydrogen “immediately” under the 2026 targets.

It comes almost a year after the deadline for member states to formally transpose RED III rules into national laws, after countries navigated balancing the high-cost impacts of the mandates with already struggling sectors.

Last week, the European Commission referred Greece, Malta and Portugal to the Court of Justice of the European Union for failing to transpose the mandates.

However, the approval comes one day after a report by think tank, the Institute for Energy Economics and Financial Analysis, warned that Germany’s approach to hydrogen could risk a €45bn gap in public finances if demand doesn’t materialise.