Author: George Mangion - Senior Partner PKF Malta
Published on Malta Business Weekly: 9th June 2022

There are many reasons that speak for hydrogen: meeting climate targets for 2030, greenhouse gas neutrality targets for 2050, energy transition or the latest pressing reason reaching independence in energy supply from Russia. Germany appears confident that it will manage to replace a large part of the oil supplies from Russia by the end of the year. In addition to replacement purchases, Germany will however also require great efforts to save energy. It seems that Germany and the whole of Europe at large feel the pressure to start speeding up the development of hydrogen.

In its national hydrogen strategy of 2020, the German federal government recognises the potential and the opportunities of hydrogen. The core mission is to replace fossil fuels particularly gaseous and liquid energy sources, which are an integral part of Germany´s energy supply. Hydrogen is seen as the key element of this energy transition, whereas only green hydrogen, which is hydrogen produced by using renewable energy, is considered to be sustainable in the long term. Even though hydrogen technology is expensive and not yet affordable for all, in the look of the fossil energy and natural gas prices and moreover the annually rising carbon taxes, green technologies will most likely prevail and be the more affordable solution in the long run.

The Federal Government has been aware of the potential of hydrogen technology for many years and has made available huge sums of funding and subsidies. Under the National Innovation Programme on Hydrogen and Fuel Cell Technology, a total of €1.4bn in funding is currently being provided and €310m will be provided under the Energy and Climate Fund for practice-oriented basic research on green hydrogen. In addition, €600m will be provided between 2020 and 2023 to foster the “Regulatory Sandboxes for the Energy Transition” and more than €1bn will be provided for decarbonising manufacturing processes between 2020 and 2023. On 3 June 2020, the Coalition Committee in Germany adopted a “package for the future” which makes available another €7bn for speeding up the market rollout of hydrogen technology and another €2bn for fostering international partnerships. This only shows a selection of efforts being made by the German government to succeed with its hydrogen strategy.

Looking at where Germany currently stands, examples of the use of hydrogen technology have existed for years. In the east of Germany, the hybrid power plant in Prenzlau produces hydrogen with surplus wind and solar kilowatt-hours and uses it as storage. In Brandenburg, the coal-dominated energy region of Lausitz is to become a hydrogen region. There are plans for a further 800 wind turbines to drive forward the production of green hydrogen. Hydrogen technology also seems very promising in terms of Co2-free inland navigation, where technologically speaking, mature solutions are ready to be presented in five years’ time. Moreover, within 10 years Europe’s inland waterways will feel the impact of hydrogen generated vessels. Since 2015, the Berlin-based company H2Mobility has been building a Germany-wide filling station network for hydrogen particular of interest for bus operators and haulage companies. Most notably, more and more Länder are building and installing hydrogen-ready pipelines to be connected to the nationwide supply network in the future.

The energy company Eon and the Australian company Fortescue Future Industries (FFI) want to bring hydrogen from Australia to Germany and other European countries on a large scale. The companies just recently signed a corresponding letter of intent. The aim is to “realise the delivery of up to five million tonnes of green, renewable hydrogen per year to Europe by 2030”. The “historic partnership” underlines the common goal of driving forward the decarbonisation of Europe and strengthening the security of supply of green energy at a time when Europe needs to reduce its energy dependence on Russia.

Author: George Mangion - Senior Partner PKF Malta
Published on Malta Business Weekly: 9th June 2022
Get in touch: info@pkfmalta.com