Germany's industrial model — the Mittelstand of precision engineering firms, the chemical giants of the Rhine corridor, the automotive complex centred on Bavaria and Baden-Württemberg — was built on cheap Russian gas. That gas is gone. The question that has consumed German economic policymakers since 2022 is whether the industrial base built on it can survive its absence, and if so, in what form.

The government's answer is green hydrogen. The National Hydrogen Strategy, updated in 2024 with a EUR 80 billion commitment over ten years, envisions hydrogen produced from renewable electricity replacing natural gas as the feedstock for industrial processes that cannot be electrified directly: steel production, chemical synthesis, high-temperature industrial heat. The strategy is not a moonshot — it is an engineering programme with detailed deployment schedules, import contracts, and infrastructure milestones.

The import dimension is critical. Germany cannot produce sufficient renewable electricity domestically to generate the hydrogen its industry requires at competitive cost. The strategy therefore includes binding agreements with hydrogen exporters in Morocco, Namibia, and Chile, where solar and wind resources allow production at costs that German industrial consumers can absorb without losing global competitiveness.

ThyssenKrupp's Duisburg steel plant, which began partial hydrogen-based production in 2024, is the programme's flagship demonstration. Its first hydrogen-reduced steel coils — sold to BMW for body panel production — carried a 12 percent cost premium over conventional steel, a gap that programme economists project will close by 2028 as electrolyser costs decline.

"We are not managing decline," said Federal Minister for Economic Affairs Robert Habeck. "We are financing a transition. The cost of not doing so would be considerably higher."