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Germany's ‘National Hydrogen Strategy’ exemplifies a bold and comprehensive approach to integrating hydrogen into its energy landscape

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Published: Thu 30 Nov 2023, 1:50 PM

In the pursuit of a sustainable and low-carbon future, Germany has emerged as a global leader with its ambitious ‘National Hydrogen Strategy’. Unveiled in June 2020, the comprehensive plan outlines a roadmap for harnessing the potential of hydrogen as a key player in the country's energy transition, or ‘Energiewende’. The country also needs to decarbonise its energy and raw material supply, which is still largely based on fossil fuels, by switching to renewable or renewable-based energy sources, such as hydrogen

Germany's commitment to reducing greenhouse gas emissions and achieving carbon neutrality by 2045 has propelled the development of innovative strategies, with hydrogen playing a central role.

Goals of the National Hydrogen Strategy

Hydrogen, often referred to as the ‘fuel of the future’, holds immense promise as a clean and versatile energy carrier. If produced in a climate-friendly way, it has the potential to significantly reduce carbon emissions and bring them down to zero. However, the production of hydrogen is comparatively energy-intensive, which is why it should be used primarily for applications where renewable electricity cannot be utilised directly.

Hydrogen technologies are not only an important tool for mitigating climate change, but can also give rise to new branches of industry offering many sustainable jobs and major export opportunities.

Many German companies, including start-ups and SMEs, are already among international leaders in hydrogen technologies, for example in the field of electrolysers for hydrogen production and the manufacturing of fuel cells, which are used to generate electricity from hydrogen. The National Hydrogen Strategy is thus designed to help Germany maintain and further expand its strong position in hydrogen technologies.

The Strategy Pursues the following Objectives in Particular

Establishing hydrogen produced from renewable energy and its downstream products as key elements of the energy transition to reduce greenhouse gas emissions.

Creating a domestic market as a first step in market ramp-up by building appropriate hydrogen production capacity and developing technologies for the use of hydrogen on the demand side.

Devising a regulatory framework for the development and expansion of the necessary transport and distribution infrastructure.

Strengthening the competitiveness of German companies by promoting the use, research, development and export of hydrogen technologies.

Securing the future supply of hydrogen from renewables and its downstream products with the help of international partnerships. These partnerships should be at a European level because of the shorter transport distances involved, but should also include non-European countries with high potential for renewable energy.

Key Pillars of the National Hydrogen Strategy

By tabling the National Hydrogen Strategy, the Federal Government is providing a coherent framework for the generation, transport and use of hydrogen, encouraging the relevant innovations and investment. The Strategy sets out the steps that are needed to meet the German climate targets, create new value chains for the German economy and foster energy policy cooperation at international level. It focuses in particular on the following goals:

Scaling Up Production: Germany's strategy emphasises the need to significantly increase hydrogen production, both green and low-carbon blue hydrogen. Green hydrogen is produced through electrolysis, using renewable electricity to split water into hydrogen and oxygen. The country aims to install five gigawatts (GW) of electrolyzer capacity by 2030, with a long-term vision of 10GW by 2040.

Transportation: Hydrogen serves as a crucial element for promoting sustainable and eco-friendly mobility, complementing various alternative propulsion methods across all transportation modes. The use of hydrogen offers a particularly high level of potential for large and heavy vehicles (e.g. in road haulage, air traffic, and maritime transport), either in fuel cells or as a feedstock for renewable electricity-based fuels, as battery-electric drives are not suitable for application throughout. Specific measures in the transport sector include promoting green hydrogen in fuel production and as an alternative to conventional fuels duch as in aviation sector. Other funding measures are targeted towards research and development as well as investments in hydrogen vehicles, especially in road haulage, air traffic, and maritime transport.

Industrial Sector: The Federal Government is actively encouraging the transition from fossil-based technologies to processes with lower or neutral greenhouse gas (GHG) emissions in order to diminish industry-related emissions. This transition is particularly crucial in sectors like steel and chemicals. A notable initiative in this regard is the Carbon2Chem project, which focuses on converting blast-furnace gases from steel production into essential inputs for fuel, plastics, or fertilisers. This endeavour involves collaborative efforts among the steel, chemical, and energy industries. Beyond offering investment grants, the Federal Government intends to introduce various funding mechanisms to support the economic viability of electrolysis plants. The implementation of 'Carbon Contracts for Difference' between the government and energy-intensive industrial companies aims to offset the higher costs associated with climate-friendly production processes compared to conventional methods.

International Collaboration: Recognising the global nature of the hydrogen market, Germany is actively engaging in international partnerships to foster research, development, and trade. The strategy envisions cooperation with other European countries and the establishment of hydrogen partnerships with countries worldwide. This collaborative approach aims to create a global hydrogen market that promotes technological advancements and ensures a secure and affordable supply of hydrogen.

Infrastructure Development: An essential component of the strategy is the expansion of hydrogen infrastructure. Germany plans to establish a comprehensive network of hydrogen refueling stations for fuel cell vehicles, ensuring that the transportation sector can seamlessly transition to hydrogen-powered alternatives. Moreover, the strategy emphasises the creation of hydrogen pipeline networks for efficient and cost-effective transportation of hydrogen from production sites to end-users.

Research and Innovation: To drive advancements in hydrogen technologies, Germany is investing in research and innovation. The strategy outlines financial support for research projects, pilot initiatives, and the development of a strong domestic supply chain for hydrogen technologies. By fostering innovation, Germany aims to enhance the efficiency and cost-effectiveness of hydrogen production, storage, and utilisation.

Germany Updates its National Hydrogen Strategy

On July 26, the German government coalition presented an update of its National Hydrogen Strategy, initially adopted in 2020. The update re-emphasises the significance of hydrogen for the energy transition and the need to focus on green hydrogen at all stages of the value chain. Hydrogen technologies are an important tool that Germany can use to significantly reduce carbon emissions, and the updated strategy aims to further scale up the hydrogen market in the country in order to achieve climate neutrality by 2045 and strengthen the security of energy supplies.

Based on the strategy, the hydrogen demand in Germany is expected to reach 95-130 Terawatt hour (TWh) by 2030. In order to meet this demand, the domestic electrolysers capacity target will need to reach 10 gigawatts, which is double the target initially envisaged in the 2020 strategy. Around 50-70 per cent of the hydrogen will need to be imported from abroad through pipelines, mainly from Norway and Denmark.

Robert Habeck, Federal Minister for Economic Affairs and Climate Protection, said: “With the update of the National Hydrogen Strategy, we are setting the framework for the new phase in the hydrogen market ramp-up, which we have consistently initiated since taking office: from research and demonstration to large-scale production. Investing in hydrogen is an investment in our future. In climate protection, in qualified jobs and the security of energy supply.”

The revamped strategy also clarifies that direct government subsidies on the production side will be limited to renewable hydrogen, but applications using low-carbon hydrogen can now be supported during the ramp-up phase of the hydrogen market.

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