The warning shot came back in June, when Europe’s largest steelmaker ArcelorMittal scrapped its plans to proceed with hydrogen-based green steel production – despite 1.3 billion euros in funding that had already been approved by the federal government and the state of Bremen. The reasons cited were a lack of economic viability and insufficient hydrogen supply.

Now it is Thyssenkrupp's turn. The federal government and North Rhine-Westphalia have agreed to provide 2 billion euros for its project – around two-thirds of the total investment. Yet the company is in talks with the Ministry for Economic Affairs over additional support to ensure profitability.

It almost seems as if corporations now have the upper hand. The fact that companies can consider leaving large subsidies on the table is a new development. Yet it is not born of arrogance, but of necessity. It shows how serious the situation has become. Energy costs in Germany, combined with the difficult global economic environment, are putting the role of hydrogen in the energy transition to the test.

The broader use of hydrogen had already stalled due to the lack of a distribution network. Producers of hydrogen and operators of hydrogen-ready gas-fired power plants or direct reduction facilities are waiting on each other: the former need customers, the latter need suppliers. As a result, progress is limited.

At the same time, financial considerations are becoming more pressing for an industry threatened on all fronts by tariffs, rising costs, and high interest rates. For climate protection, hydrogen will only be viable where no cheaper alternative offers comparable CO₂ savings: in the chemicals industry, in steel production, in aviation fuels, and as backup in gas-fired power plants. As a substitute fuel for natural gas in heating or for gasoline in cars and trucks, it is too expensive compared with heat pumps and electricity. A difficult debate is looming over how far the federal government should go in subsidising the scale-up. Subsidies are certainly needed in the early stages, but they should not amount to an all-inclusive safety net. Companies must also take risks themselves if they want to establish themselves in the market.