The Evaporating Promise of the Swiss Hydrogen Economy

For years, hydrogen was touted as the silver bullet of the green energy transition. Now, the gas seems to be running out of steam. Across Switzerland, the hydrogen dream is quietly being dismantled as economic realities set in.

The agricultural cooperative Agrola is shuttering its filling stations in Zofingen, Rothenburg, and Schötz. Plans for production facilities in Seewen, Brugg, and Gerlafingen have been unceremoniously scrapped. Even on the picturesque waters of Lake Brienz and Lake Thun, the shipping operator BLS has abandoned its hydrogen ambitions, opting for battery-electric propulsion instead. The market has spoken, and it prefers the straightforward economics and lower complexity of batteries over the logistical hurdles of hydrogen.

The chill is being felt at the very top of the supply chain. Axpo operates Switzerland’s largest hydrogen production plant in Domat/Ems, yet it finds itself producing a fuel few actually want to buy. According to the energy giant, the anticipated boom in hydrogen mobility never materialized, and industrial demand remains stubbornly low.

Researchers at the Eastern Switzerland University of Applied Sciences point to a fundamental lack of planning security. Industrial consumers demand guarantees that affordable hydrogen will be available for decades before committing to costly infrastructure overhauls. The result is a classic economic deadlock: without demand, no one builds production facilities, and without production scale, prices remain utterly uncompetitive against fossil fuels.

Naturally, when the market fails to deliver, industry players turn their gaze to the state. The Swiss Federal Council adopted a national hydrogen strategy in 2024, aiming to connect the wealthy, albeit politically isolated, country to the European hydrogen grid while offering financial support for production and storage. For producers like Axpo, this is insufficient.

The company is actively lobbying for concrete consumption targets to artificially stimulate demand. Yet, in a refreshing display of market-oriented restraint, the Swiss Federal Office of Energy has rejected these calls for state-mandated quotas. The federal agency maintains that its role is merely to set broad climate and energy targets, correctly leaving the choice of technology entirely to the private sector.

Despite the broader retreat, isolated prestige projects soldier on. In a Lucerne shipyard, the diesel engines of the passenger vessel Saphir have been ripped out to make way for a bespoke hydrogen drive. The local shipping operators openly admit that the exorbitant fuel prices are secondary to the technical expertise and public relations value generated by the venture. It is a highly characteristic Swiss endeavour: wealthy enough to fund a romantic, economically questionable experiment, and perhaps a touch naive in hoping one ship can single-handedly revive a stalling national industry. While batteries continue to dominate the pragmatic transition, hydrogen is increasingly relegated to the realm of expensive corporate image campaigns.

Written by Thomas Nussbaumer thomas.nussbaumer@alpineweekly.com