German industry calls for faster hydrogen rollout as tighter climate targets loom

German industry leaders have called for a faster rollout of hydrogen projects after the government brought forward a net-zero target to 2045.

A year on from the launch of Germany's 5-GW national hydrogen strategy, and industry executives have been showcasing some of the 200-odd projects at Handelsblatt's German hydrogen summit ending May 27.

Many of the projects are seeking designation as Important Projects of Common European Interest (IPCEI), clearing the way for state aid.

While IPCEI recognition is clearly important, industry leaders also took the opportunity to air concerns on the policy front.

Martin Brudermueller, CEO of chemicals firm BASF, called for reform of energy taxation to help projects, including its own 50-MW electrolyzer at Ludwigshafen.

BP Europe chairman Wolfgang Langhoff called for more pragmatism allowing higher annual run-time hours for electrolyzers than the 5,000 hours currently set by regulation defining green hydrogen as exempt from the EEG levy approved May 19.

"Markets are created by demand with refineries well placed for a ramp-up of green hydrogen," the BP Europe chairman said flagging two projects to supply hydrogen to its refineries at Lingen and Gelsenkirchen set to start 2024 and scalable from initial 50 MW (project with Orsted) and 100 MW (GETH2) respectively.

Import demand

On behalf of the federal government, State Secretary for Energy Thomas Bareiss said he expected first imports of green hydrogen by 2024 under the H2Global initiative, under which up to Eur2 billion in state support is to be assigned via auction to international electrolysis projects seeking to supply the German hydrogen market.

Meanwhile the government's hydrogen coordinator Stefan Kaufmann flagged an Australian initiative that could supply significant hydrogen volumes at around A$2/kg ($1.55/kg) following talks with Australian government representatives in April.

Germany had also signed MoUs on hydrogen cooperation with Canada and Saudi-Arabia.

Putting the challenge in context, Fraunhofer president Reimund Neugebauer said producing all German transport fuels via electrolysis-based production would require up to 2,850 TWh/yr of renewable energy by 2050. Meanwhile Germany had viable domestic potential for up to 1,000 TWh of renewable energy.

Research by Stiftung Klimaneutralitaet showed that up to Eur5 billion/year would be needed to bridge the cost gap between conventional hydrogen and renewable hydrogen use.

S&P Global Platts assessed the cost of renewable hydrogen (PEM electrolysis with capex) at Eur5.37/kg on May 26, more than double the cost of natural gas-derived hydrogen with CCS (Netherlands TTF MA gas, SMR with CCS, capex) at Eur2.23/kg.

Germany's Eur9 billion hydrogen strategy aims for 5 GW of electrolysis by 2030.

First measures and interim regulations are emerging in the context of wider "Fit for 55" climate proposals being worked up by the European Commission.

The EC proposals are now expected be published around July 14 after EU leaders on May 26 informally debated details, ranging from effort sharing rules to a carbon border adjustment mechanism.