Quantifying hydrogen’s role in multi-sector decarbonization using price-elastic demand curves

• Hydrogen demand curves derived using an integrated energy system model. • Early market ramp-up requires substantial hydrogen price reductions. • Industry shows the strongest demand, with a minimum of 144 TWh. • Demand for power supply is highly sensitive to hydrogen price changes. • Transport and buildings show limited hydrogen use unless prices fall significantly. Green hydrogen is a key component of the transition to greenhouse gas neutrality, but its future uptake is highly sensitive to price dynamics. This study addresses a crucial research gap by quantifying price-elastic hydrogen demand within a greenhouse gas neutral, sector-coupled energy system for Germany. Using a national energy system model, the analysis captures cross-sectoral interactions and identifies the main drivers of hydrogen demand across the industry, transport, power, and buildings sectors. Hydrogen demand exhibits strong price sensitivity across sectors, with a non-linear increase that accelerates sharply at lower prices, rising from 163 TWh to 1,164 TWh. Hydrogen remains indispensable for the decarbonization of emission-intensive industrial processes, with high-price demand of about 144 TWh persisting in steel, ammonia and methanol production, and high-temperature heat, underscoring the need for substantial price reductions to enhance future competitiveness. In the power sector, hydrogen provides critical backup flexibility, with demand rising from 12 to 381 TWh as prices decline, reflecting its high price sensitivity. In transport, electrification remains dominant across most applications, while fuel-cell trucks drive demand growth at lower prices. In buildings, hydrogen plays only a minor role, with notable uptake emerging solely at very low prices. These findings demonstrate hydrogen’s pivotal role in decarbonizing sectors with high abatement barriers. Overall, substantial price reductions are essential to accelerate early market formation and ensure a cost-effective transition, underscoring the need for targeted, sector-specific policies to achieve greenhouse gas neutrality.