German hydrogen import pathways: checking reality under uncertainty

Low-carbon hydrogen is considered the missing link of the energy transition, especially in hard-to-abate industrial sectors, storage and sustainable mobility, and a key component of EU's plans for both post-COVID recovery programs and decoupling from Russian hydrocarbons. Germany is the member State deploying a more active hydrogen diplomacy to secure H2 imports to accelerate its H2 transition and replacing grey H2 with low-carbon H2. The article assesses the feasibility of Germany's H2 transition by 2030 in a context of high uncertainty by evaluating four alternative H2 import policy pathways: a market pathway focused on minimising costs, a geoeconomic pathway prioritising EU producers and neighbours (nearshoring), a geopolitical pathway aimed at securing imports from allies (friendshoring), and a sustainable pathway focusing on green hydrogen and renewables (greenshoring). The article proposes an innovative modelling design that assesses Germany's H2 transition by integrating stochastic simulations and combinatorial optimisation to project realistic trade scenarios with (or despite) high levels of uncertainty. It tries to complement the existing techno-economic literature on low-carbon hydrogen trade with a beyond-cost approach. The results shed light on the supply implications of the different policy dimensions included in Germany's H2 import strategy. Unexpectedly, prioritising the environmental and climate dimension through greenshoring would attain similar results in covering German import demand as a pure market approach, and both scenarios obtain better results than prioritising proximity and geopolitics.