INES on the BMWK White Paper: Early Investments in Hydrogen Storage Only Possible with Suitable Support Instruments

The Federal Ministry for Economic Affairs and Climate Action (BMWK) presented its White Paper on the future hydrogen infrastructure last week. The Initiative Energien Speichern (INES) welcomes the BMWK’s objective to organize hydrogen storage in a competitive manner in the long term. At the same time, INES cautions that the current proposal to rely solely on demand-side support may not be sufficient to ensure the timely development of the necessary storage infrastructure.

Berlin, April 22, 2025 – “With the White Paper, the BMWK aims to establish a competitive framework for hydrogen storage from the outset. In principle, we share the view that storage facilities can be operated in a competitive environment in the future,” said Sebastian Heinermann, Managing Director of INES. “However, due to the long development timelines for hydrogen storage, the ramp-up phase of the hydrogen market requires early investments in storage infrastructure, so that demand can be met as soon as it arises. The proposed focus on demand-side support will not be enough to synchronize storage development with future demand. INES therefore continues to recommend the use of Contracts for Difference as a support instrument to incentivize early investment in hydrogen storage and thus enable a successful hydrogen market ramp-up.”

Contracts for Difference as the Key to Storage Development

INES has repeatedly emphasized in previous statements that, due to lengthy planning and approval procedures, hydrogen storage projects must be prepared and developed today to keep pace with the market ramp-up. A purely demand-driven support approach, as currently proposed in the White Paper, does not address this urgency.

Instead, INES proposes the use of so-called Contracts for Difference. These contracts provide investment security through government subsidies that bridge the gap between market prices and storage costs—a model that has already proven successful in other areas of the energy transition. The German Energy Agency (dena) has also confirmed in a study that Contracts for Difference are a particularly effective instrument for supporting hydrogen storage.

MAHS Market Survey Provides Reliable Data for Storage Needs

With the MAHS market survey ("Market Survey for Hydrogen Storage"), INES laid an important foundation in 2024 for determining realistic storage demand figures during the hydrogen market ramp-up. The results of this survey are cited in the BMWK’s White Paper as a relevant data basis—clear evidence of the importance of the initiative and the strong cooperation to date.

INES fundamentally welcomes the BMWK’s competitive approach and acknowledges that defining the right support instruments is a complex challenge in the current phase of the hydrogen market ramp-up. Time will tell whether the proposed demand-side support will be sufficient to accelerate the development of storage infrastructure at the required pace. To mitigate risks and maintain strategic flexibility, INES recommends that complementary tools such as Contracts for Difference also be considered at an early stage—ensuring the reliable ramp-up of the hydrogen market.

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