German state-owned utility Uniper has announced a likely delay in its planned €8 billion ($8.7 billion) investment in cleaner fuels, citing slower-than-expected demand for hydrogen in the industry. The news reflects rising skepticism among German firms regarding the feasibility and cost-effectiveness of the government’s hydrogen-focused emissions reduction strategy.
Uniper, which was bailed out by Berlin during the 2022 energy crisis, recently re-evaluated its strategy, which aimed for €8 billion in investments through 2030, primarily focused on hydrogen and biomethane, said CFO Jutta Doenges. “We are now less optimistic about the timeline for implementing a green hydrogen economy,” Doenges told analysts, following an anticipated two-thirds drop in nine-month core profit. She added that potential business-to-business (B2B) customers showed hesitation in committing to significant green hydrogen or ammonia supply agreements.
The German government has positioned green hydrogen, produced using renewable energy, as a central component of its plan to make the economy climate-neutral by 2045. However, the federal economy ministry acknowledged the challenges and uncertainties in developing a new hydrogen market from scratch. Doenges noted that the expected roll-out of hydrogen power plants is slower than anticipated, stating that Uniper would “potentially move a little bit slower” on its transition strategy and “adjust the pace of our transformation.”
In parallel, Uniper is preparing for a stock market return following Berlin’s acquisition of a 99.12% stake as part of a €13.5 billion rescue package after Gazprom, its Russian gas supplier, halted deliveries. To aid this transition, Uniper has begun repaying the government, transferring €530 million in September. A separate set of provisions is now valued at just under €2.5 billion and is expected to be transferred in early 2025, although the final amount remains subject to change.
