Germany's Renewable Transport Fuel Mandate Drives Green Hydrogen Import Demand

Germany formally adopted the European Union's Renewable Energy Directive III (RED III) into national law on May 8, establishing mandatory renewable fuel requirements for transport fuel suppliers. Under the legislation, fuel suppliers must source increasing percentages of hydrogen as renewable fuels of non-biological origin (RFNBOs) beginning in 2026.

The mandate begins at 0.1% of transport energy in 2026, rising to approximately 1.2% by 2030 and 10% by 2040. BloombergNEF estimates suggest these quotas could generate demand for around 250,000 tonnes of green hydrogen annually in Germany by 2030, increasing to 1.6 million tonnes by 2040.

Provaris Energy, a compressed gas transport and storage company, argues Germany cannot produce sufficient domestic green hydrogen at commercially competitive prices to meet these quotas, requiring approximately 100,000 tonnes of annual imports from 2030. Structural challenges limiting European hydrogen production include high power prices, grid constraints, and elevated capital costs.

Non-compliance penalties of €120 per gigajoule establish a strong economic incentive for fuel suppliers to secure compliant hydrogen, equivalent to roughly €14–15 per kilogram. Provaris believes compressed hydrogen shipping from Nordic production hubs offers a viable import pathway, estimating delivered costs around €7/kg depending on electricity pricing and shipping distance. The company cites RFNBO rules requiring physical and traceable supply chains rather than certificate-based offsets as favoring reliable logistics solutions.

Originally reported by Hydrogen Central. Read the full article →