Germany Turns Hydrogen Demand into Law — Can Latvia learn from this?
Germany’s new THG-Quote reform shows how hydrogen demand can move from policy ambition to binding market signal. For Latvia, the lesson is practical: transport, ports and industrial fuel users need clear demand instruments if the hydrogen economy is to move beyond pilot projects.
POLICYNEWS
HydrogenLatvia
4/29/20262 min read
Germany creates a bankable hydrogen demand signal
Germany has taken one of the more concrete steps in Europe’s hydrogen market development by voting through a reform of its national THG-Quote — the greenhouse gas reduction quota for transport fuels. The reform requires fuel suppliers to reduce the CO₂ intensity of fuels more aggressively, lifting the quota pathway to 65% by 2040 and creating a dedicated market pull for renewable fuels of non-biological origin, including green hydrogen and hydrogen-based e-fuels.
The important detail is timing. The RFNBO quota does not wait for the 2030s. It starts in 2026, then gradually scales from 1.5% in 2030 to 10% in 2040. This gives project developers, fuel suppliers, refineries, logistics operators and investors a long-term signal that demand for renewable hydrogen will not depend only on grants or voluntary procurement.
Why this matters for the hydrogen economy
Hydrogen projects often struggle not because the technology is missing, but because demand is not bankable enough. Germany’s approach addresses exactly this gap: it converts climate policy into a predictable fuel-market obligation. According to Germany’s environment ministry, the 2030 minimum obligation alone is expected to incentivise around 2 GW of electrolysis capacity, while the wider reform is intended to strengthen demand for renewable hydrogen, e-fuels, sustainable biofuels and electricity in transport.
This is a useful shift in language for the wider European hydrogen sector. Instead of asking whether hydrogen will find a market, Germany is defining where part of that market must appear — in transport fuels, refinery use and synthetic fuel pathways. That is the kind of policy architecture investors can model.
Lessons Latvia can apply
Latvia already has a relevant policy base. The new Latvian Transport Energy Law, entering into force on 1 January 2026, requires transport-sector emissions to be reduced by at least 16% from 2030 and creates space for renewable energy in fuel supply, charging infrastructure and non-biological renewable fuels along major TEN-T corridors.
The German example shows how Latvia could go further by translating these broad obligations into clearer hydrogen-specific demand signals. A Latvian RFNBO pathway does not need to copy Germany’s scale, but it could replicate the structure: phased targets, credible compliance rules, eligibility for certified renewable hydrogen and e-fuels, and a transparent link between fuel suppliers and project developers.
Practical replication areas for Latvia
The most relevant Latvian replication areas are not passenger cars. They are ports, freight corridors, municipal and regional heavy transport, industrial fuel users and future hydrogen-derived fuels. These are the segments where electrification alone may not cover every use case, and where hydrogen can create value through fuel security, energy storage, local renewable integration and export-oriented Power-to-X development.
Latvia’s updated energy and climate planning already recognises RFNBOs as renewable fuels of non-biological origin, including hydrogen, and the EU RED III framework sets a minimum RFNBO contribution in transport by 2030. The next step is to make this practical for the local market: identify early offtakers, create predictable demand pockets, and connect hydrogen deployment with renewable electricity, port infrastructure and industrial decarbonisation.
From pilot logic to market logic
Germany’s initiative is not only about higher climate ambition. It is about moving from demonstration logic to market logic. For Latvia, this is the key takeaway.
HydrogenLatvia stakeholders can use this moment to start a more concrete discussion on how Latvia should structure its own renewable fuel demand instruments. The first movers will not be those who wait for perfect market conditions. They will be those who help shape the conditions early — with practical regulation, credible offtake and projects that can be financed.
Source: Bundestag stimmt Anhebung der Treibhausgasminderungs-Quote zu