Green hydrogen comes out on top

Trend in hydrogen production in the EU, © Hydrogen4EU
© Hydrogen4EU

Germany plans to overdeliver on EU targets


Climate change has become a hot topic in the runup to the German election, with politicians imbued with a new sense of urgency. In April 2021, Germany’s constitutional court published its ruling on the country’s Climate Change Act, triggering the need for swift action to toughen up emission targets: In just a few days the federal cabinet agreed to a new climate law which then quickly received its blessing from the powers that be. Preparations to implement European RED II legislation have also been progressing at speed. So what does this mean for the hydrogen and fuel cell sector?

It had long been expected that the German government would set out measures to enable the country to implement the European Union’s Renewable Energy Directive, RED II. On May 20, 2021, the German parliament passed an amendment that resulted in the 2030 greenhouse gas reduction target for fuels rising from 6 percent to 25 percent. The previous goal had been a 22 percent decrease in emissions. The new law envisages the share of renewable energy as part of overall energy consumption increasing within the transport sector from 10 percent to 32 percent by 2030. This compares to the EU’s requirement for road and rail transport of 14 percent.

“This decision will see Germany leading the way in renewables within the transport sector. The new quotas for climate-friendly fuels and renewable energy in transport mean that we are going far beyond EU requirements.”

German environment minister Svenja Schulze

The German environment ministry, which deemed the RED II agreement a “good compromise,” stated: “Along with strong incentives for the use of green hydrogen and support for charging points, our future intention is also to offer support particularly to advanced biofuels that are produced from waste and residue.” According to proposals, biofuels made from palm oil will be prohibited from 2023 while targeted funding will be made available for synthetic fuels in circumstances where there are no alternatives to fossil fuels, for instance in aviation. Furthermore, a system of double accounting will be employed to promote the use of green hydrogen in road transport and in refineries. The direct use of power in electric cars is also being encouraged through triple accounting within the greenhouse gas quota.

German economy minister Peter Altmaier explained: “We are prepared to shoulder more than we have promised to do up until now.” He also asserted: “I would like us to raise the expansion targets for renewables.” While that may be the case, it was Altmaier who had contributed significantly to the decline in the solar industry, and then also the wind industry, by reining in renewable expansion plans in the past.

What does “green” actually mean?

To date, refineries have almost exclusively used hydrogen that is derived from fossil energy sources. Now that the use of green hydrogen and orange hydrogen from biomass will be factored into the reduction quota in future, this should increasingly force fossil fuels out of the market for the transport sector as a whole. For aviation, a minimum quota of 0.5 percent will come into force in 2026 for liquid fuels, produced using power-to-liquid technology. The target will then increase to 2 percent from 2030 onward. According to Stefan Kaufmann, innovation commissioner for green hydrogen at the German education ministry, most of Germany’s planned 5-gigawatt electrolyzer capacity would be needed to achieve the 2 percent target by 2030, which is why there would hardly be any capacity left for power-to-x fuel production for other sectors.

The day before, the German cabinet had redefined its interpretation of what constitutes green hydrogen. Consequently, hydrogen is designated “green” if it is produced “electrochemically,” in order words by means of electrolysis. This new definition is intended to give more clarity when dealing with Germany’s redrafted renewable energy law EEG 2021.

… Read more in the latest H2-International e-Journal, May 2021

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