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A new oil rush? Germany on the way to the hydrogen age

It took much longer than expected, but now the Federal Government has presented its National Hydrogen Strategy. And while the plans in Germany have caused many positive reactions internationally, the domestic response is characterized by a typical German “Yes, but…”.

Of course, not all questions have been resolved in detail yet. Still, the hydrogen strategy does succeed in one thing: For the first time, it comprehensively shows how the decarbonization of the German economy, society and its mobility with all its interdependencies can succeed – with hydrogen as the central energy carrier.

The strategic vision is in place. It includes a complete commitment to green hydrogen; in other words, hydrogen produced exclusively from renewable energy sources.

This commitment had already been the subject of the loudest criticism before the government’s strategy document was released: Green hydrogen alone will not be able to generate sufficient market uptake for the gas. Also, ‘blue’ and ‘turquoise’ hydrogen (produced from natural gas, whereby the carbon is split off and collected) is needed – at least as a bridging technology.

The German government does not entirely exclude the employment of blue and turquoise hydrogen during the transitional phase. However, no special funding is planned. In the long term, solar, wind, and water power shall make hydrogen the curde oil of the future

Ambitious plans

The plans of the Federal Government are ambitious. And they must be. After nuclear and coal power are phased-out, the energy supply of the future must now be generated to power the German economic engine. Not more, not less. Hydrogen is the answer to this enormous challenge.

So it is no surprise that the EU Commission is also working on a European strategy. It is safe to assume that Germany will use its presidency of the EU Council to push forward hydrogen in Europe, too.

The areas of application for hydrogen are diverse. Preferably, it should be used wherever energy is needed. Though hydrogen is the most common chemical element in the universe, to make it available as an energy source for industry or mobility, it, unfortunately, requires a lot of energy first.

Thus, the German hydrogen strategy initially focuses on areas of application where there are no (genuine) CO2-free alternatives.

The chemical and steel industries are the first to be mentioned here, followed by heavy-duty traffic, aviation, and shipping.

The German government has been investing in the development of hydrogen technologies since 2006. Approximately 700 million euros in funding have been approved up to 2016, and a further 1.4 billion euros are planned up to 2026, plus another 1.1 billion euros for basic and applied research and for so-called “real laboratories of the energy transition.”

A further 8 billion euros are earmarked for production and applications for the market ramp-up.

And since Germany will not be able to produce the hydrogen needed in the future on its own, international cooperation projects are to be funded with another 2 billion euros. A first project within the framework of the development cooperation with Morocco has already been agreed: Here, the German development bank KfW is financing a 100-megawatt plant with 300 million euros.

Structured implementation

The money is certainly necessary to stimulate the desired market upturn. Currently, about 55 terawatt-hours (TWh) of hydrogen are consumed in Germany. The demand is mainly for production processes in the primary and petrochemical industries.

By 2030, the German government expects a hydrogen demand of about 90 to 110 TWh. In addition to the financial support instruments, a whole series of legislative measures are planned. The National Hydrogen Strategy lists 38 measures: Legislative projects, the adaptation of regulations, the implementation of European requirements, cooperation projects, the adaptation of the “EEG levy,” and coordinated cooperation between the various federal ministries. Some of these measures have already been formulated in very concrete terms, while other ideas still need to be developed.

In order to implement and further develop the National Hydrogen Strategy, flexible and results-oriented governance structures are to be created. A committee of state secretaries of the ministries concerned will be responsible for strategic management. The committee will receive advice and support from the National Hydrogen Council, a body of experts from science, industry, and civil society.

Governance Structure the National Hydrogen Strategy:

Exactly twenty years ago, the then German coalition government of the Social Democrats and the Greens decided to phase out nuclear power. Last year, the government sealed the end of coal-fired power. Now, the National Hydrogen Strategy marks the beginning of a new energy era. With climate change and a new, post-Corona, modernization dynamic, one may hope for a new oil rush. In any case, now is the time to commit to hydrogen in Germany.

Link to the strategy document in English: https://www.bmbf.de/files/bmwi_Nationale%20Wasserstoffstrategie_Eng_s01.pdf