The National Hydrogen Council (NHC) welcomes the continuation of the National Hydrogen Strategy (NHS), which was formally adopted by the German cabinet today: “It is an important milestone that the German government is ambitiously continuing the National Hydrogen Strategy – because hydrogen is of immense importance for industry and technology policy,” said NHC Chairperson Katherina Reiche.
“Only with hydrogen can we preserve value chains and ensure that key industries remain in Germany. This added value cannot be overestimated. German industry needs safe, clean and affordable energy to remain internationally competitive and to safeguard jobs in the future.”
The National Hydrogen Council is convinced that the transition to climate-neutral production and the international competitiveness of German industry as well as small and medium-sized industrial enterprises depends on the sufficient availability of hydrogen and its derivatives at competitive conditions. Katherina Reiche added: “Companies will only invest if they have long-term planning security. We must therefore already look beyond the year 2030. According to forecasts by the National Hydrogen Council, the demand for hydrogen and hydrogen derivatives will increase to between 964 and 1,364 terawatt hours by 2045. The US Inflation Reduction Act and similar regulations around the world will accelerate the development of comprehensive value chains on an industrial scale – extending from production to applications in different sectors. In view of the rapid progress made by other countries, the German government should refrain from relying exclusively on lighthouse projects. It is more important to create effective incentives for the rapid scaling of the hydrogen economy and the development of new business models.”
From the National Hydrogen Council’s point of view, it is already clear that demand cannot be met with the German government’s domestic electrolysis target of 10 gigawatts. Therefore, the planned import strategy is the logical step in order to provide sufficient hydrogen and its derivatives at competitive conditions in combination with domestic production: “We need sustainable import partnerships,” says National Hydrogen Council Deputy Chairperson Felix Matthes, “This requires intensive cooperation with potential supplier countries, also for ensuring the comprehensive sustainability of the supplies of hydrogen and hydrogen derivatives. But we also urgently need robust framework conditions for shoring up the development of long-term supply contracts. By 2045, we will import the majority of hydrogen – probably even more than 80 per cent for derivatives such as methanol, ammonia or synthetic aviation fuels.”
Expansion of hydrogen infrastructure and creation of good framework conditions
The majority of the National Hydrogen Council welcomes that all climate neutral hydrogen types are to be taken advantage of for the ramp-up phase to cover the demand and are to be promoted on the application side. This measure is an important step for the ramp-up phase in order to ensure a sufficient supply of hydrogen without creating competition for use.
A prerequisite for a rapid ramp-up of the hydrogen economy is the swift establishment of a correspondingly efficient infrastructure – and this includes both the right financing and the appropriate regulation. The committee is expressly in favour of the infrastructure being developed by the private sector. The first step would be a supra-regional core network. But the distribution network operators – especially the high-pressure networks – also play a crucial role as a connecting element to the hydrogen customers of the industrial SME sector. For an efficient reuse of existing gas grid infrastructure, it must be ensured at the European level that the unbundling regulations for hydrogen grid operators are based on those for gas grid operators.
In the view of the National Hydrogen Council, a further prerequisite for the development of the infrastructure is suitable financing and thus investment security. Initial grid customers must not be deterred by prohibitive grid fees, there needs to be sufficient liquidity for investing companies – and no disadvantaged financing, grid fee or grid access conditions for downstream distribution grids.
Establishing hydrogen applications
The NHC emphasises the importance of hydrogen in terms of industrial and technological policy. The traditional competencies of German industry, in particular high-precision mass production and continuous, technically superior development, offer the best prerequisites for the industrialisation of hydrogen technology, which is indispensable for cost and scaling reasons.
In order to stimulate the market ramp-up along the entire value chain and for a broad manufacturer and supplier industry, a coherent framework for assistance and action is indispensable.
The NHC welcomes the statements on the role and importance of hydrogen and its derivatives in transport. In its view, the transport sector, in particular aviation and shipping as well as parts of road freight transport, is suitable as an entry market for the establishment of value-added and supply chains for hydrogen and derivatives in Germany against the background of today’s cost structure.
The NHC advocates municipal heating planning as a crucial planning instrument for the heating system transition. From the perspective of the National Hydrogen Council, all technology options – heat pumps, heat grids, renewable heat and hydrogen – are needed for a successful transition to renewable heating. Thus, all technologies should be anchored as equal fulfilment options in the Building Energy Act (Gebäudeenergiegesetz) and be taken into account in the expansion of the infrastructure.
The National Hydrogen Council supports the planned simplification and acceleration in the construction of facilities and infrastructure as well as the removal of regulatory barriers in order to accelerate the expansion of the hydrogen production, transport, refuelling and import infrastructure.
The rapid market ramp-up requires, from the perspective of the NHC, legally binding and, if possible, uniform sustainability standards and certification systems for hydrogen and its derivatives in the EU that are internationally compatible. This requires, as now presented with the continuation of the National Hydrogen Strategy, not only an outlook until 2030 – but until at least 2035, including essential market parameters.
The NHC recognises the importance of research and development (R&D) as well as the availability of skilled labour for the development of the global hydrogen economy in equal measure. In order for Germany to maintain its current position in the international competition for innovations and skilled workers, R&D activities must focus on the topics that have already been prioritised and that promote industrial implementation. At the same time, there is a need for stringent training of the necessary skilled workers, both at tertiary level and in the area of vocational education and training.
The National Hydrogen Council looks forward to continuing its constructive advisory role to the German government in the ramp-up of the hydrogen economy.
The National Hydrogen Council (Nationale Wasserstoffrat)
With the adoption of the National Hydrogen Strategy, the German government established the National Hydrogen Council on 10 June 2020. The Council consists of 26 high-level experts from business, science and civil society who are not part of the public administration. The members of the Hydrogen Council have expertise in the areas of production, research and innovation, decarbonisation of industry, transport and building/heating, infrastructure, international partnerships, as well as climate and sustainability. The National Hydrogen Council is chaired by Katherina Reiche, CEO of Westenergie AG and former Parliamentary State Secretary.
The task of the National Hydrogen Council is to advise and support the State Secretary’s Committee for Hydrogen (Staatssekretärsausschuss für Wasserstoff) with proposals and recommendations for action in the implementation and further development of the Hydrogen Strategy.
All NHC publications are available here for download.
Source: National Hydrogen Council (www.wasserstoffrat.de)