National Strategy, Green Deal and Covid-19

Now that’s what you call luck. Right around the editorial deadline of our sister magazine HZwei, the German government debated, passed and presented its strategy to support the hydrogen and fuel cell industry.

Five federal ministries were involved in drafting the strategy. Their compromise agreement sets a 2030 target of “only” 5 gigawatts in installed electrolyzer capacity, not 10, as the German science minister Anja Karliczek strongly proposed.

However, the strategy does concede a note on adding another five by 2035 “if circumstances allow.”

As anticipated, both the national hydrogen and fuel cell association DWV and the national gas and water industries association DVGW were not happy about the outcome. DWV chairman Werner Diwald and DVGW president Gerald Linke now hope that the “remaining five gigawatts” will be added by 2030, not by 2035 or even 2040.

Also as expected, political and business leaders initially tried to keep the focus on commercial and rail vehicles, as well as ships and airplanes, not on passenger cars. But the biggest consumer of hydrogen, to be mainly produced using clean energy sources, will most likely be the industrial sector, the steel, cement and refinery industries in particular.

What came as a bit of a surprise was the suggestion that the EEG surcharge on electrolyzer output be dropped altogether. Even though the proposal was introduced at a late stage in negotiations, it is nevertheless worth mentioning, as the federal economy ministry did everything it could to avoid the debate. Subsequent statements by the ministry’s staff members fueled speculation that the new energy surcharge rules would be approved without changes. However, the consensus now seems to be: “We are planning to remove the EEG surcharge on hydrogen produced from clean energy sources.” The government then pledged that the removal would not lead to an overall increase in EEG charges.

Even though some have criticized the strategy proposal, all in all the government agencies have struck a compromise people can live with. The most important thing about the deal is that it provides predictability and a stable environment for investing, regardless of the precise target for electrolyzer capacity.

You can read more about Germany’s national hydrogen strategy, and the debates leading up to it, on pages 10 to 15 of this issue. And on page 18, you will find our interview with Frans Timmermans, who offers us a first glimpse of the EU’s upcoming hydrogen agenda.

Other oft-discussed questions these days are what will happen to the energy market transformation and climate action programs now and post-Covid-19, and whether interest in hydrogen will continue to grow as much as it has in recent times. What will become of the FridaysForFuture movement? Will we ever see another climate summit? Will we compulsively fall back on old patterns, continuing to rely on fossil fuels? Or will the hydrogen and fuel cell industry emerge stronger from the crisis in the near future? Could a hydrogen economy help revive the concept of a European identity?

I believe the chance for a genuine European energy market transformation has never been as promising as it is today. But it all depends on how we deal with the current situation. Every one of us can make a lasting contribution by jumping into action and making their voice heard.

If we keep following yesterday’s leaders, as we did pre-Covid-19, lamenting that ICE cars are not eligible for economic incentives, nothing much will change. No matter how efficient the latest gas or diesel engine, all of them use fossil fuels and compound pollution. Don’t forget, we are talking about a 140-year-old technology. It is high time we come up with something new.

I think it laudable that the government sticks to its guns, deciding in favor of innovative and sustainable technologies and against ICE incentives. When it comes to electrification, China overtook Germany a long time ago. Volkswagen may have abruptly changed course at the twelfth hour, still, their focus is on batteries only. And where does that leave them? In hot water, apparently, after multiple issues with the software and delivery of the new VW ID.3. Though to be fair, not one German automaker has made much progress in producing a viable electric vehicle.

It is crucial that the German auto industry at least tries to keep up with the latest developments on the commercial vehicle market, or even sets new trends. In the market for passenger cars, Tesla upended the automakers’ entire world view. Nikola Motors is now the next US-based startup (see p. 52) to try to do the same, this time for trucks. And how do German automakers respond? By announcing a plan to electrify the truck sector no earlier than the end of this decade and offer fuel cell buses in 2022, or later than that (see p. 36). I am sorry, but not only will the world look different in 10 years, we also need fuel cell buses within the next weeks or months, not in two years.

We have an enormous chance – let’s use it – the potential is vast.

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