The effects of establishing a hydrogen industry in Northern Germany

Andreas Lagemann and Stephen Sacht

No 3/2025, HWWI Working Paper Series from Hamburg Institute of International Economics (HWWI)

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.

Keywords: Computable General Equilibrium Model Analysis; Hydrogen Economy; Regional and Industrial Development; Northern Germany; Regulations (search for similar items in EconPapers)
JEL-codes: C68 O13 Q21 R13 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:hwwiwp:315476

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