Hydrogen Around the World: European Cooperation a Focal Point in Upcoming Hydrogen Energy Push

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Bennett Jones LLP[co-author: Kenryo Mizutani - Articling Student]

Following Australia, and Japan and South Korea, in the final post of our series outlining national hydrogen strategies around the world, we map out the hydrogen strategies of Germany and the European Union. We will return with a further post reviewing Canada's national strategy when it is released.

Germany's hydrogen strategy is intertwined with the EU's hydrogen strategy, and premised on regional collaboration to create opportunities for hydrogen both on the demand-side and the supply-side. Germany's hydrogen focus coincides with its assumption of the EU Council Presidency effective July 1, 2020.

Overview

The table below provides a brief overview of Germany's National Hydrogen Strategy, released June 17, 2020, as well as the EU's Hydrogen Strategy, published on July 8, 2020.

  Scale of Funding Types of Projects Governance
Germany

€600 million allocated between 2020 and 2034 to transfer technology and innovations from lab to market.

€500 million for practice-oriented energy research.

€1.4 billion between 2020-2026, in addition to €700 million already provided for the national Innovation Programme on Hydrogen and Fuel Cell Technology.

Recently released stimulus package provides €7 billion for market ramp-up of technologies, and further €2 billion for international partnerships.

Primary focus on achieving carbon neutrality by 2050.

Will remain a major energy importer.

Cooperation with other EU Member States for clean hydrogen trade and hydrogen technology.

Focused on domestic infrastructure and developing and exporting hydrogen and Power-to-X (P2X) technologies.

The State Secretaries' Committee on Hydrogen, composed of relevant ministries, is established to coordinate the federal policy.

The National Hydrogen Council, composed of high-level experts from science, business and civil society will advise the federal government.

The Hydrogen Coordination Office in the federal government will support federal implementation alongside the National Hydrogen Council.

Close cooperation between federal and state levels is emphasized.

European Union Estimated €145 billion in grants and subsidies by 2030 Investment strategy supported by European Clean Hydrogen Alliance. Primary focus on developing hydrogen produced from wind and solar energy in order to achieve climate neutrality and a zero pollution goal. The European Clean Hydrogen Alliance, composed of public authorities, industry and civil society, implements the EU's hydrogen strategy.

The strategies of Germany and the EU prioritize the environmental benefits of a shift towards hydrogen energy. As stated by the EU Commission in July 2020:

In the past, there have been peaks of interest in hydrogen, but it did not take off. Today, the rapid cost decline of renewable energy, technological developments and the urgency to drastically reduce greenhouse emissions, are opening up new possibilities.

Notable Projects

Germany's hydrogen strategy is closely tied to their goal of achieving GHG neutrality by 2050, including by using green hydrogen to transition towards greener energy sources. For example, a 30 MW electrolysis plant is planned adjacent the Heide oil refinery near Hamburg, to extract carbon-free hydrogen that will be used by the Heide refinery instead of fossil fuel-based hydrogen.

Germany also seeks to become a leading exporter of P2X technologies converting electrical energy into liquid or gaseous chemical energy sources, such as hydrogen, through electrolysis and further synthesis processes, with companies such as Siemens developing comprehensive P2X offerings. As Minister of Education and Research Anja Karliczek stated, "Green hydrogen technologies should soon bear the 'Made in Germany' seal".

Germany's national strategy is closely linked to the EU strategy. As Germany has limitations to its renewable energy generation capacity, Germany's energy transition will require much of its hydrogen to be imported. Accordingly, Germany places importance on cooperation with other EU Member States, particularly those bordering the North and Baltic Seas to develop supply chains. Further, Germany is seeking to establish a reliable regulatory framework with other EU Member States for clean hydrogen production.

The EU's strategy mirrors Germany's goals, aiming to develop renewable clean hydrogen produced from wind and solar energy, in an effort to achieve climate neutrality and a zero pollution goal. The EU strategy focuses mainly on electrolysers, and aims to install at least 6 GW of renewable hydrogen electrolysers in the EU and produce up to 1 million tonnes of renewable hydrogen to decarbonize existing hydrogen production by 2024. By 2030, the EU seeks to increase renewable hydrogen electrolysers to 40 GW with production of 10 million tonnes of renewable hydrogen.

Key Takeaways

Germany and the EU's national strategies make clear that hydrogen energy will likely stand at the forefront of decarbonization and attaining climate neutrality. However, this transition will take time. While both Germany and the EU aim to eventually rely on "green hydrogen" from renewable sources, they also recognize in the nearer term that integrating hydrogen technologies and conventional fossil fuels as transition fuels is critical.

Thank you to Claire Lingley, Summer Law Student, who greatly assisted in the preparation of this blog.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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