Germany aims to become the world's "number one" in green hydrogen technology, betting the fuel produced by renewable energy sources can both reduce carbon emissions globally and stimulate Europe's top economy.
"For reasons related to our competitiveness but above all to reach our ambitious climate goals", ministers agreed Wednesday to pump nine billion euros ($10.2 billion) of government cash into the technology, Economy Minister Peter Altmaier told reporters in Berlin.
"Seven billion euros will go on supporting hydrogen's entry into the market in Germany, while a further two billion euros are earmarked for "international partnerships", Altmaier added.
Green hydrogen is seen by Berlin as a key link in the chain between renewable energy generation and end users, allowing easy storage and transport of power generated from the sun or wind.
So-called "green" hydrogen is produced by electrolysis -- using electricity to split water into hydrogen and oxygen -- rather than being obtained from fossil sources, as the gas historically has been.
Possible applications for the new fuel include production of climate-neutral steel, where producers are experimenting with it as a replacement for carbon-intensive coal furnaces.
"All steel industry bosses recognise that in the long term, we only have a chance of producing climate-neutral steel in Germany... with green hydrogen," Altmaier said.
Elsewhere, it could be used to store energy for the winter, or to power road vehicles as an alternative to battery-electric drive, he added.
By 2030, Germany aims to have five gigawatts of hydrogen-producing capacity nationwide, rising to 10 gigawatts by 2040 at the latest.
Ministers also hope to export the technology and know-how to produce green hydrogen to other countries.
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