Federal coordination of complex policy issues in the energy transition: Hydrogen Governance in Germany

The significance of federal structures in the implementation of renewable energy and climate change policies has received increasing attention. Decision-making in this policy area often is a matter of choosing between technology alternatives under high uncertainty, with the risk of technological lock-in or sunk costs. This issue is particularly pertinent in multi-level systems, where technology-specific policies can result in interdependencies between different jurisdictions. The emergence of hydrogen as a promising energy carrier in the global energy transition further adds to the technology alternatives and the complexity of the energy transition. Germany, as one of the leading industrial nations, has made it a priority to integrate hydrogen into its energy mix. The National Hydrogen Strategy of the German government aims to accelerate the market ramp-up of hydrogen technologies. However, energy policy in Germany is characterized by strong administrative federalism, with legislation concentrated at the federal level, but significant autonomy for the Länder (states) in implementation. Moreover, each Land has its own hydrogen-specific interests, with 15 out of 16 publishing their own hydrogen strategies. The pursuit of individual interests by the Länder in the implementation of their own hydrogen strategies could lead to a fragmentation of efforts, while not addressing the mentioned functional interdependencies. Our paper analyzes the different strategies at the federal and sub-national levels to assess coherence and fragmentation. In a second step, we discuss to what extent this assessment can be explained by the (lack of) coordination capacity of the federal system. For this purpose, we present findings from expert interviews with government officials responsible for hydrogen strategies. The paper proposes a novel two-dimensional analytic framework, which covers a vertical-horizontal dimension and an internal-external dimension of coordination, combining concepts from federalism and public administration literature. This framework provides a comprehensive approach suggested to capture the multifaceted conditions and constraints for successful coordination of complex problems, which can also be applied to other multilevel systems. Overall, the proposed paper offers a critical evaluation of the current state of hydrogen strategies in Germany and examines the tensions caused by the strong administrative federalism and particular Länder interests.