22. March 2022 By Julius Glaser and Zoe Holdt
Hydrogen – homework for policymakers
What has been said so far?
Climate change in general isn’t the only thing that is forcing policymakers and society at large to have a rethink – geopolitical conflicts that accelerate the need for countries to become energy independent are, too.
While the German Federal Minister of Finance, Christian Lindner, only recently brought the urgently needed independence of renewable energies back into focus, describing them as ‘freedom energies’ (probably also due to crises such as the one in Ukraine), the German Federal Minister for Economic Affairs and Climate Protection, Robert Habeck, already commented on the future of hydrogen at the beginning of the year: ‘We are adapting our measures for the market ramp-up of hydrogen technology to double the production of green hydrogen compared to previous plans. To this end, we will revise the National Hydrogen Strategy this year and launch additional funding programmes.’
The coalition agreement of the new federal government states that: ‘In addition to expanding the infrastructure, we will significantly increase electrolysis performance targets, advance European and international climate and energy partnerships for climate-neutral hydrogen and its derivatives on an equal footing and introduce quotas for green hydrogen in public procurement to create lead markets.’
Policymakers must create a legal basis for this, but also provide financial incentives. The next legislative period is crucial for Germany’s global positioning as a technology leader in a future hydrogen market economy. This is the only way that the nation can succeed in creating the regulatory framework necessary to be competitive on Europe’s industrial stage and in taking the decisive step for climate protection by 2030.
What do policymakers need to do in the short, medium and long term?
In order to establish Germany as a (technological) pioneer in the industry, policymakers need to implement short, medium and long-term measures to ensure that German industry can take up its ambitious competitive position. In general, this includes planning and scaling the generation and storage capacities required, suitable infrastructures and frameworks.
The National Hydrogen Council, a body consisting of experts from the industry, has formulated over 80 measures to pave the way for successful market penetration. These are divided into sectors – ‘generation’, ‘industry’, ‘mobility’, ‘heating’, ‘infrastructure’, ‘research and development, innovation and education’ and ‘international’ – and were prioritised according to their urgency. These measures concern both EU level and Germany itself.
Let’s take a closer look at some of the short-term measures for ‘generation’, ‘industry’, ‘mobility’ and ‘heating’ for Germany:
- a. Blue and turquoise hydrogen Directional decision as a bridge option in the market ramp-up
- b. Hydrogen production and imports Set targets
- c. Expansion of renewable energies Expand corridors
- d. Funding Consistent implementation of the announced funding programmes
- e. Budgetary resources for the market ramp-up Obtain extension and flexibility in terms of timing
- a. Use climate-neutral hydrogen to the greatest extent possible Make it available
- b. Verification of the origin and use of hydrogen Introduce a verification system
- c. Bringing hydrogen to the customer Connection to networked infrastructure
- d. Promote hydrogen-based production processes Create incentive regulations
- e. Create planning security Make funding commitments via special funds binding (allow them to be combined with EU funding programmes)
- f. Establish lead markets State incentive systems
- a. Create infrastructure Establish a filling station network embedded in the EU
- b. Test technology options Pilot projects along the value chain
- a. Remain open to different technologies Avoid predetermining technologies for decarbonisation paths
- b. Analyse heating market Evaluate technology paths
- a. Create a legal framework Amend the German Energy Act (Energiewirtschaftsgesetz, EnWG) to establish hydrogen as an energy carrier
- b. Establish financing for development Create affordable and stable fees for transport customers
This list of short-term measures represents only a fraction of the measures for which it is now up to the policymakers in Germany to create reliable conditions in order to achieve Germany’s ambitious goals. In addition, there are medium to long-term measures that cannot fall by the wayside and that must be worked out and coordinated closely with Germany’s responsibilities at EU level.
In any case, it’s obvious that the transition to a world that uses hydrogen as its main source of energy will also require a great deal of research and change management, especially in the short term. Last but not least, society itself needs to embrace the change and put it into practice along with industry.
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