German LEAG suspends energy project using green hydrogen

German energy company LEAG, the country’s second-largest electricity supplier, is suspending its 110 MW hydrogen energy project in Saxony for an indefinite period, according to Reuters.

The company said that construction of H2UB Boxberg is being delayed due to political and economic conditions.

The H2UB Boxberg project was announced in April 2024. It involved the construction of a large-scale, green, energy-efficient storage facility, as well as a center for the production and use of hydrogen at the site of decommissioned lignite-fired power plants.

“We are currently postponing plans for hydrogen production in Boxberg and initially shifting our focus to other technologies for the generation, storage, and flexible provision of electricity,” said a LEAG spokesperson.

According to him, there is currently no reliable schedule for the implementation of hydrogen infrastructure in the region. In addition to the hydrogen economy being far from the expected growth, there is also a high degree of uncertainty regarding the availability and prices in this future market.

The energy complex in Boxberg was to include an electrolyzer with the capacity to produce about 2 tons of hydrogen per hour and a storage facility with a capacity of 60 tons. The hydrogen was to be converted into electricity using a fuel cell. There were also plans to install a “GigaBattery” (lithium-ion and redox flow batteries with a capacity of over 1,000 MWh) and sell the remaining green hydrogen to third parties. The complex was scheduled to start operating in 2029.

LEAG is based in the Lusatia region and is owned by Czech investor EPH.

This announcement came a week after ArcelorMittal abandoned plans to convert two German steel mills to carbon-neutral production, citing high energy costs.

At the end of March 2025, Thyssenkrupp Steel suspended a tender for the purchase of environmentally friendly hydrogen for its direct iron reduction plant in Duisburg. This move was due to the fact that the proposed prices for hydrogen were significantly higher than the company’s expectations, and other framework parameters of the hydrogen economy, which is developing more slowly than expected, will change significantly.