Germany plans to remove offshore electrolysis from transformation fund
Germany's government is planning to remove financial support for offshore electrolysis projects from its Climate and Transformation Fund (KTF), raising fresh concerns about the country's green hydrogen ambitions.
The draft business plan for the Climate and Transformation Fund (KTF) proposes eliminating dedicated funding for offshore electrolysis and grid-supporting electrolysis projects from 2027 onward. Offshore electrolysis involves producing green hydrogen directly at offshore wind farms, allowing renewable electricity to be converted into hydrogen before being transported to shore.
The proposed cuts have sparked criticism from energy industry groups, which argue that the move could slow Germany's efforts to build a domestic green hydrogen economy. Industry representatives warn that reducing investment in hydrogen infrastructure may delay the country's transition away from fossil fuels and make it more difficult to meet long-term climate goals.
The funding changes come as the German government reshapes spending priorities within the Climate and Transformation Fund. While billions of euros are still being allocated to reduce electricity costs for businesses and households, several climate-related programs are facing budget reductions as part of a broader effort to control public spending.
Despite the planned cuts, Germany continues to view green hydrogen as a key element of its energy transition. However, experts caution that removing support for offshore electrolysis could slow project development, reduce investor confidence, and make it harder for the country to achieve its renewable energy and industrial decarbonization targets in the coming years.