Achieving successful green hydrogen projects in Germany: Insights from project developers and investors

Abstract

Despite ambitious targets and increasing support mechanisms, the realization of green hydrogen projects in Germany remains slow and only a limited number of projects reach a Final Investment Decision (FID). While cancelations are an expected feature of market-based investment processes, the current project pipeline appears insufficient to meet deployment goals. This paper investigates stage-specific barriers to green hydrogen projects – from early planning and the pre-FID stage to achieving FID, construction, and eventual operation – with a particular focus on financing-related constraints that shape project bankability. The analysis draws on 33 semi-structured interviews with project developers (n = 15) and investors (m = 18) in Germany and applies qualitative content analysis to identify and compare perceived challenges and recommendations across phases and stakeholder groups. The results show that political and economic barriers dominate. Key obstacles include inefficient funding mechanisms, strict green hydrogen criteria, persistently weak economic feasibility driven by high electricity costs and complex power procurement, and offtake uncertainty and limited bankability prior to operation. Based on the empirical evidence, policy implications are derived that prioritize (1) demand-side incentives and de-risking mechanisms to enable long-term offtake, (2) credit-enhancement and risk-sharing instruments to mobilize debt financing, and (3) streamlined permitting and funding processes to reduce delays and transaction costs.