A massive ramp-up in hydrogen technology is needed to implement the European Green Deal and to achieve the climate goals. In order to make the investments required for this, the subsidy framework of the EU must be urgently amended.
In its statement of 7 October, the German National Hydrogen Council (NWR – Nationale Wasserstoffrat) welcomes the approach of the EU Commission to further develop the guidelines for climate, energy and environmental state aid. The committee sees however, need for improvement on key points.
In terms of achieving the goals of the European Green Deal, the German National Hydrogen Council (NWR) observes positive further development in the draft revised guidelines for climate, energy and environmental state aid 2022 presented by the EU Commission on 7 June. This pertains in particular to the options for balancing financial gaps and the instruments for hedging investment risks (carbon contracts for difference). Other regulations, such as subsidies to reduce and eliminate greenhouse gas emissions as well as subsidies in the form of a reduction in electricity levies for energy-intensive companies, are also indications of the right direction. In the view of the NWR however, there is a need to improve in this area in order to avoid legal uncertainty to the detriment of companies and member states.
The German National Hydrogen Council criticizes the fact that the draft did not compile together the various state aid issues of a hydrogen economy ramp-up in a separate hydrogen chapter. In view of the close interweaving as well as the many interdependencies of state aid issues in hydrogen production, hydrogen infrastructure and hydrogen applications, a coherent treatment of the subject in its own separate chapter would be urgently advised.
In hydrogen production, NWR is generally in favour of the reduction of subsidies for green hydrogen. However the committee sees the need for bridging options in the area of hydrogen infrastructure and certain hydrogen applications. The current draft also lacks an adequately clear regulation under which renewable electricity for hydrogen electrolysis could be exempted from surcharges, fees, taxes and levies.
The NWR is concerned that the scope for limiting the burden of taxes and levies on electricity consumption for energy-intensive raw material industries to avoid carbon leakage is restricted in the current draft. Here the implementation of effective strategies for carbon leakage protection and the support for investments in climate-neutral transformative technologies must be sufficiently addressed.
The German National Hydrogen Council
With the adoption of the National Hydrogen Strategy, the federal government appointed the National Hydrogen Council on 10 June 2020. The Council consists of 26 high-ranking experts from industry, science and civil society who are not involved in public administration. The members of the Hydrogen Council have expertise in the areas of generation, research and innovation, decarbonisation of industry, transport and buildings/heat, infrastructure, international partnerships as well as climate and sustainability. The National Hydrogen Council is led by Katherina Reiche, Chairperson of the Board of Westenergie AG and former Parliamentary State Secretary.
The mission of the German National Hydrogen Council is to advise and support the state secretaries’ committee on hydrogen through proposals and recommendations for action in implementing and further developing Germany’s hydrogen strategy.