Posted on 07 Jul 2021
Germany's hydrogen council has called for an urgent decision by the next government -- after this autumn's election -- on the role and status of blue hydrogen, the government-appointed advisory body said July 2.
Natural gas-based production of hydrogen with carbon capture and storage (known as blue hydrogen) runs a distant second in Germany's strategy to production via electrolysis mainly using renewable electricity, but a majority in the council "supports blue hydrogen as a bridging technology", Veronica Grimm, a government economic adviser and member of the council, said.
That would help meet near-term demand for low carbon hydrogen and allow for a transition in existing energy trading partnerships, Grimm said.
The action plan's first of 80 points for the next government calls for clarification of state aid availability for blue hydrogen.
The outcome would have significant impact on volumes required especially via imports, it said.
By 2040, sufficient volumes of renewable or green hydrogen must be available to meet climate targets, the council said.
An addendum to the action plan highlights opposition by some in the council to a more prominent role for non-renewable types of hydrogen.
Meanwhile hydrogen production using relatively new pyrolysis technology was only seen as viable after 2030, it said.
Germany will hold a federal election on Sept. 26.
The country's new climate law brought forward to 2045 the net-zero target, setting a new target of a 88% cut in CO2 emissions over 1990.
In any case, a robust certification system for various types of hydrogen was key, it said calling for EU harmonization to international certification partnerships.
In Germany, a new trajectory for the expansion of renewables was required, another urgent task for the next government, with a focus on reducing electricity prices inflated by taxes and levies, it added.
Near-term, demand and supply of decarbonized hydrogen remains limited, but a study commissioned by the council concluded that this would change rapidly in the 2030s.
According to a meta-study by Fraunhofer, demand for hydrogen could grow to up to 300 TWh by 2040.
"Without the widespread use of hydrogen, we will not be able to achieve the climate targets. The demand in industry, transport and the heating sector is much higher than politicians have expected so far," council head Katherina Reiche said after the previous meeting in June.
The action plan focused first on industry with demand by the steel and chemical industry estimated at 1.7 million mt/year by 2030.
While petchems was already gas-based for its hydrogen demand, the switch from grey to green was mainly expected after 2030, the plan said.
Initial focus was on steel with some 10 million mt/y or a third of German production expected to switch to direct reduction (DRI) by 2030.
This would require some 0.6 million mt/y of hydrogen and could cut 17 million mt CO2.
Switching from coal to gas would already cut two-thirds of emissions and allow for flexibility, it said.
Transport demand would add 0.8 million mt mainly through fuel cell vehicles with 0.27 million mt via e-fuels for land transport and aviation.
The heating sector had the biggest uncertainty to 2030 with a specific study commissioned for the sector.
For hydrogen in power generation, the council saw no significant role to 2030.
One year on from the hydrogen strategy, Germany has implemented interim regulation for hydrogen including an exemption of electricity for electrolyzers from the EEG levy.
The government also shortlisted 62 projects with 2 GW electrolyzer capacity as Important Projects of Common European Interest (IPCEI).
The hydrogen strategy earmarked Eur9 billion in the coronavirus recovery fund including Eur2 billion for projects abroad.
Some 3.2 GW of electrolyzer projects have been proposed in Germany, according to S&P Global Platts Analytics database -- still short of the 5 GW target for 2030.
Europe's biggest PEM electrolyzer -- a 10 MW unit at Shell's Rheinland refinery -- was opened July 2 by NRW prime minister Armin Laschet, the leading candidate to replace Chancellor Angela Merkel after the election. In his opening speech, Laschet focused on international partnerships for hydrogen.
The head of Germany's H2Global Task Force Timo Bollerhey told Platts June 24 that the initiative expected physical delivery of a first cargo of hydrogen into Germany by end-2024.
The action plan called for an expansion of the H2Global concept. The election manifesto by the leading CDU/CSU block also called for an expansion of the initiative with hydrogen covering a full page.
Platts assessed the cost of renewable hydrogen in the Netherlands (PEM electrolysis and capex) at a record Eur6.52/kg July 2 after Dutch electricity soared above $100/MWh.
Source:Platts
