The German National Hydrogen Strategy – Hydrogen as a strategic way out of the energy crisis

There are many reasons that speak for hydrogen: meeting climate targets for 2030, greenhouse gas neutrality targets for 2050, energy transition or the latest pressing reason reaching independence in energy supply from Russia.

G“Looking at where Germany currently stands, examples of the use of hydrogen technology have existed for years. In the east of Germany, the hybrid power plant in Prenzlau produces hydrogen with surplus wind and solar kilowatthours and uses it as storage.”

ermany appears confident that it will manage to replace a large part of the energy supplies from Russia by the end of the year. In addition to replacement purchases, Germany will, however, also require great efforts to save energy. It seems that Germany and the whole of Europe at large feel the pressure to start speeding up the development of hydrogen.

In its national hydrogen strategy of 2020, the German federal government recognises the potential and the opportunities of hydrogen. The core mission is to replace fossil fuels particularly gaseous and liquid energy sources, which are an integral part of Germany´s energy supply. Hydrogen is seen as the key element of this energy transition, whereas only green hydrogen, which is hydrogen produced by using renewable energy, is considered to be sustainable in the long term. Even though hydrogen technology is expensive and not yet affordable for all, in the look of the fossil energy and natural gas prices and moreover the annually rising carbon taxes, green technologies will most likely prevail and be the more affordable solution in the long run.

The Federal Government has been aware of the potential of hydrogen technology for many years and has made available huge sums of funding and subsidies. Under the National Innovation Programme on Hydrogen and Fuel Cell Technology, a total of €1.4bn in funding is currently being provided and €310m will be provided under the Energy and Climate Fund for practice-oriented basic research on green hydrogen. In addition, €600m will be provided between 2020 and 2023 to foster the Regulatory Sandboxes for the Energy Transition and more than €1bn will be provided for decarbonising manufacturing processes between 2020 and 2023. On 3 June 2020, the Coalition Committee adopted a “package for the future” which makes available another €7bn for speeding up the market rollout of hydrogen technology in Germany and another €2bn for fostering international partnerships. This only shows a selection of efforts being made by the German government to succeed with its hydrogen strategy.

Looking at where Germany currently stands, examples of the use of hydrogen technology have existed for years. In the east of Germany, the hybrid power plant in Prenzlau produces hydrogen with surplus wind and solar kilowatthours and uses it as storage. In Brandenburg, the coal-dominated energy region of Lausitz is to become a hydrogen region. There are plans for a further 800 wind turbines to drive forward the production of green hydrogen. Hydrogen technology also seems very promising in terms of Co2free inland navigation, where technologically speaking, mature solutions are ready to be presented in five years' time. Moreover, within 10 years Europe's inland waterways will feel the impact of hydrogen generated vessels. Since 2015, the Berlin-based company H2Mobility has been building a Germany-wide filling station network for hydrogen particular of interest for bus operators and haulage companies. Most notably, more and more Länder are building and installing hydrogen-ready pipelines to be connected to the nationwide supply network in the future.

The energy company Eon and the Australian company Fortescue Future Industries (FFI) want to bring hydrogen from Australia to Germany and other European countries on a large scale. The companies just recently signed a corresponding letter of intent. The aim is to "realise the delivery of up to five million tonnes of green, renewable hydrogen per year to Europe by 2030". The "historic partnership" underlines the common goal of driving forward the decarbonisation of Europe and strengthening the security of supply of green energy at a time "when Europe needs to reduce its energy dependence on Russia as quickly as possible". Importing energy is only one side of the coin of a German-Australian hydrogen partnership. The other is the interest of German companies in supplying technology and knowhow to Australia since Germany occupies a leading position in the research and optimisation of electrolysers. The German government is aware that there are better locations for the production of hydrogen than in Germany. Germany’s strength lies in mechanical engineering, providing machines and know-how for the production, transport, conversion and loading of green hydrogen as well as for generating green electricity in the first place.

With his recent visit to Tokyo chancellor Scholz is working on a hydrogen alliance with Japan. Upon special request, Olaf Scholz visited the Japanese company Chiyoda in Yokohama which, with the support of the Japanese government, developed technology to transport hydrogen across the high seas. Around 2030 the company is aiming to use that technology commercially. It is clear that Germany wishes to collaborate with Japan, which is considered a country of hydrogen technology. Both countries seem to agree that hydrogen is the “new gas”. However, Germany and Japan are not necessarily on the same page regarding the replacement of Russian oil, coal and gas. Japan, for instance, has no intention of stopping its oil and gas production in the Russian arctic. Moreover,

Japan has a rather flexible energy policy open to nuclear energy sources and primary production of “brown” hydrogen produced with energy derived from coal.

During India’s Prime Minister Modi's visit to Berlin on 2 May, Chancellor Scholz emphasised India's key role in climate policy. Germany and India agreed on a memorandum of understanding consolidating their future visions regarding the technology of hydrogen whereas both countries expressed cooperation in the areas of production, processing, application and transport of green hydrogen. India had recently already announced its intention to become a "global hub" for and an important exporter of green hydrogen. These efforts by India are of great interest to the German economy, whose goal is to be CO2neutral by 2045. Due to the good conditions for the production of renewable electricity, India could become a globally significant production location for green hydrogen in the long term.

The international endeavours show that there are high expectations for the production of green hydrogen. It is the national hope that the available hydrogen technology is going to be used as soon as possible and then optimized during operations to not fall behind on what seems to be a race against the clock. The main takeaway however is that the hydrogen business is truly an international undertaking calling for a united, open and global community with strong partnerships.