Assessing Safeguards for Hydrogen Sustainability in Germany's Carbon Contracts for Difference

The study evaluates the Klimaschutzverträge (KSV) scheme in Germany, finding risks that 'low-carbon' hydrogen may receive indirect subsidies and that removing emissions reduction criteria from bid evaluations could disadvantage green hydrogen. It recommends implementing a holistic sustainability standard for all hydrogen imports and explicitly accounting for transport emissions to ensure resource efficiency.

• The KSV scheme may inadvertently provide indirect subsidies for 'low-carbon' hydrogen production, despite the German National Hydrogen Strategy prohibiting direct public funding for such production, because projects can include production costs in their bid prices.
• A revised draft of the KSV Funding Directive proposes removing the emissions reduction criterion for bid evaluation, which the authors argue would reduce the competitive advantage of green hydrogen compared to 'low-carbon' alternatives.
• There is uncertainty regarding whether transport emissions from upstream hydrogen are included in KSV bid prices, which could result in energy losses and emissions not being fully reflected.
• Hydrogen imports may bypass EU environmental and social regulations unless the KSV explicitly requires compliance; the authors recommend a holistic sustainability standard that includes local value addition in exporting countries.

APA

NewClimate Institute (2025). Assessing Safeguards for Hydrogen Sustainability in Germany's Carbon Contracts for Difference. http://www.newclimate.org/resources/publications/assessing-safeguards-for-hydrogen-sustainability-in-germanys-carbon

Chicago

NewClimate Institute. Assessing Safeguards for Hydrogen Sustainability in Germany's Carbon Contracts for Difference. 2025. http://www.newclimate.org/resources/publications/assessing-safeguards-for-hydrogen-sustainability-in-germanys-carbon.

Wikipedia

{{cite report |author=NewClimate Institute |title=Assessing Safeguards for Hydrogen Sustainability in Germany's Carbon Contracts for Difference |date=11 February 2025 |url=http://www.newclimate.org/resources/publications/assessing-safeguards-for-hydrogen-sustainability-in-germanys-carbon |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{newclimateinstitute2025assessing, author = {{NewClimate Institute}}, title = {{Assessing Safeguards for Hydrogen Sustainability in Germany's Carbon Contracts for Difference}}, institution = {NewClimate Institute}, year = {2025}, month = feb, url = {http://www.newclimate.org/resources/publications/assessing-safeguards-for-hydrogen-sustainability-in-germanys-carbon}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }