This study analyses the hydrogen industry and policy in the USA and develops an agenda for cooperation between Germany and the USA.
The USA is the world’s largest producer and consumer of hydrogen after China, with around 12 to 16 percent of production globally. As of 2021, the country made a U-turn on its energy and climate policy: President Biden has re-joined the Paris Agreement and plans to decarbonise the electricity sector by 2035 and make it carbon neutral by 2050. The USA will focus increasingly on sectors that are difficult to decarbonise, including hydrogen.
Hydrogen potential in the USA
With its extensive and inexpensive solar and wind energy resources, the USA has the ideal conditions for the production of green hydrogen. By using a fraction of its renewable energy potential, the USA could fully cover its own energy needs and export considerable amounts of green hydrogen to countries like Germany, which do not have the same conditions for production. That stated, the USA also has the best conditions for the production of grey hydrogen, which is made using fossil fuels, as well as blue hydrogen, which is produced using natural gas with CO2 capture and storage.
Hydrogen can resolve conflicting goals between climate protection, economic interests and foreign and security policy
In the medium to long term, green hydrogen offers the USA the prospect of large-scale, climate-neutral energy exports. This could help resolve the perceived conflict between climate protection, economic interests and foreign and security policy in America. In this way, hydrogen could win over conservative circles with a progressive energy policy agenda. Given that many countries that need to import energy are going climate neutral, continuing efforts to export liquefied natural gas make little sense in the long run.
Energy dialogue between Germany and the USA
Setting the course for transatlantic green hydrogen trade
The USA does not fully recognize the potential for the export of green hydrogen. This could be the starting point for the energy policy dialogue with that country: green hydrogen offers the German-American relationship the opportunity to conduct politically sustainable climate discourse on transatlantic energy trade. Instead of talking about economically and politically questionable import terminals for liquefied natural gas, both countries could set the course for the transatlantic trade of green hydrogen.
Avoid importing natural gas and intensify the expansion of renewable energies
Germany intends to achieve climate neutrality on the basis of energy efficiency, sufficiency, and by using renewables and green hydrogen. By doing so, Germany will not need to import any gas at all in the long term. The roadmap to a climate neutral gas sector should be spelled out more in detail by Germany and the EU. This would also help to make it clearer to the USA and support the German government counter criticism of Nord Stream 2 in a constructive and sustainable manner. In addition, it would create an added incentive for the USA to advance its climate protection efforts. For Germany, green hydrogen imports from countries and regions with emission-intensive energy systems might be conceivable in the transitional phase, but would not make sense for long-term climate policy.
Cooperation opportunities for Germany and the USA
In addition to the foreign policy discourse, there are many opportunities for cooperation between Germany and the USA when it comes to hydrogen:
Collaboration in scaling technology markets
Joint development and testing of shipping technologies
Coordination of research projects
Feasibility studies for the value chain
Concepts for hydrogen export hubs and
Exchange on the further development of technical standards and certification procedures.
You can find out more about hydrogen in the USA as well as the discourse, policy and opportunities for transatlantic cooperation in the study.