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The effects of establishing a hydrogen industry in Northern Germany

Author

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  • Lagemann, Andreas
  • Sacht, Stephen

Abstract

Currently, achieving sustainable transformation toward a carbon-dioxide-free industrial production process is one of the greatest challenges. The chemical element hydrogen used as an energy source and a basic feedstock can play an important role in reaching this goal. Our analysis is based on the CGE framework and focuses on a total switch toward hydrogen used in production in northern Germany until 2045. The simulation results indicate that such a cost-intensive procedure can lead not only to a negative development in regional GDP and employment but also to a decline in the output of heavy industries such as chemical, steel, and copper. Reverse effects are obtained in the case of further deregulation, which has the potential to increase the efficiency of an established hydrogen core network. This observation emphasizes the need to accompany the transformation process by maintaining low-level regulation.

Suggested Citation

  • Lagemann, Andreas & Sacht, Stephen, 2025. "The effects of establishing a hydrogen industry in Northern Germany," HWWI Working Paper Series 3/2025, Hamburg Institute of International Economics (HWWI).
    • Handle: RePEc:zbw:hwwiwp:315476
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    More about this item

    Keywords

    Computable General Equilibrium Model Analysis; Hydrogen Economy; Regional and Industrial Development; Northern Germany; Regulations;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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