Which country will be the first to establish a hydrogen economy? It’s not just the German energy sector that has been plagued by this question. Following the introduction of new legislation in the United States – the Inflation Reduction Act – which sets out highly attractive conditions for creating a hydrogen industry, Germany once again risks being left on the sidelines. That’s why representatives from German businesses and associations have joined forces to argue the case for swift political action.
One demand put forward by the German hydrogen and fuel cell association DWV, which is now being reiterated by its chairman Werner Diwald at every event, calls for the rapid implementation of the 37th BImSchV (37th Ordinance on the Implementation of the Federal Immission Control Act). For months, the DWV has been pointing out that industries act on a global scale and primarily invest where the best conditions can be found. So long as an absence of clarity prevails in Germany (with regard to the EU’s revised Renewable Energy Directive RED II and the 37th BImSchV), industry does not have the necessary planning certainty to make investment decisions, explained Diwald.
Andreas Rimkus, hydrogen representative from the SPD parliamentary group, has also repeatedly made the following appeal to German environment minister Steffi Lemke in unison with the DWV: “Please release the 37th BImSchV!”
“Everything speaks in favor of quickly creating the legal framework for the use of green hydrogen in refineries. Yet the German environment ministry has been avoiding taking the decisive step for years.”
Werner Diwald, DWV chairman
Meanwhile the US has acquired a far greater level of planning certainty following the Biden administration’s announcement of the Inflation Reduction Act. Since then, an increasing number of European electrolyzer manufacturers are openly considering expanding their production capacity there rather than investing in Germany. Against this backdrop, Diwald warns that in just a few weeks circumstances could arise that mean Europe would lack the capacity to establish a hydrogen economy because the order books of manufacturers may potentially be already filled with US commissions.
The US Inflation Reduction Act, according to the DWV head, is based on Germany’s renewable energy law EEG. According to his remarks, those responsible in the US looked extremely closely at the EEG and adapted its principle for hydrogen. What the German response to it could look like is still undecided. Ingrid Nestle, head of the climate protection and energy working group of the Greens parliamentary faction, declared that now isn’t the time to provoke a one-upmanship battle.
Hydrogen strategy overhaul
German industry, however, is hoping for a revision of the country’s national hydrogen strategy. Various ministers have, time and again, stated that a new draft is in the pipeline. The original aim was to present the second version before the winter break, though at the time of writing that seems unlikely since the German economy ministry especially is busy tackling issues on several fronts.
To underline the urgency of the current situation, a total of 30 companies and associations from the energy sector sent an open letter to German economy minister Robert Habeck on Nov. 10, 2022. In this communication, a copy of which has been seen by H2-international, the DWV asks on behalf of all signatories not only for a rapid enactment of the 37th BImSchV but also for more planning certainty in general. Diwald stated: “Germany needs an immediate response to the USA’s Inflation Reduction Act which is supporting the scale-up of the hydrogen economy by providing over USD 50 billion in secure resource funding. Unless the German government takes immediate action there is a risk that […] the hydrogen industry will relocate to the USA.”
More than four billion tonnes of cement are produced worldwide every year. In the process, the building material inevitably releases large quantities of the carbon dioxide bound in the lime. Cement manufacturers, such as CEMEX from Mexico, are meeting the gigantic challenge of decarbonizing the industry. A bottleneck in the development is lack of green hydrogen. The building materials manufacturer has now set ambitious targets for itself. The site in Rüdersdorf is to serve as a blueprint.
For production of green cement, it is not only the required energy that is a problem, since only one-third of the CO2 emissions originate from the energy input. Two-thirds are intrinsic to the system. These are emissions that arise in the course of cement production itself. A cement produced with purely green energy still releases huge amounts of CO2 during the production process. Businesses and researchers want to change this.
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Change for the climate also means changing cement to eco-cement. Various scientists are also working on this, among them the research institute Empa in Switzerland, which is developing a CO2-negative magnesium-based cement. Building materials manufacturer CEMEX also wants to rapidly reduce its emissions. According to the company’s calculation, it is already releasing 35 percent less CO2 than in 1990, Sergio Menendez states. He is president of CEMEX Europe, Middle East, Africa and Asia. By 2030, it should be 55 percent less in Europe, and the manufacturer wants to produce only CO2-neutral concrete worldwide by 2050.
So far, however, there has been little demand for green products, CEMEX speaker Alexandra Decker laments. The company therefore has the idea of separating carbon dioxide from exhaust gas, storing it temporarily and then converting it together with H2 into synthetic fuel. Thus providing a product that is planned for in advance and producible on demand. “This is another reason why we only want to use green hydrogen,” Decker assured H2-international.
CEMEX has specifically chosen to build electrolyzers at the location in Rüdersdorf so that it can supply the factory there with hydrogen from green electricity. In this way, H2 that might be needed for other industries would also not be taken off the market. The construction would have to start in 2025/26 for the site to produce CO2-free from 2030 onwards, Decker states.
The consortium Concrete Chemicals
In order to free not only cement production but also air traffic from CO2, three companies founded the project consortium Concrete Chemicals. CEMEX, with 56,000 employees worldwide and its own locations in Germany; Sasol ecoFT, a subsidiary of chemical corporation Sasol; and Uckermark-based Enertrag plan to produce a sustainable aviation fuel that can also be used in cement production. For this, a power-to-liquid method (PtL) will come into use. CO2 and H2 are converted into syngas. The mixture of carbon monoxide and H2 is then, with the aid of the Fischer-Tropsch process, converted into longer-chain hydrocarbons to produce e-kerosene.
The project in Rüdersdorf comprises two scaling levels. First, the hydrogen will be produced on site with electricity from regional renewable energy plants. In this first stage, 15,000 tonnes of e-kerosene are to be produced annually this way. For it, 100 tonnes of CO2 per day are to be captured in Rüdersdorf, combined with 12 tonnes of H2 per day and used for PtL production. In the second stage, larger quantities of H2 are to be delivered by pipeline.
The green hydrogen will be generated as part of the IPCEI project Elektrolyse-Korridor Ostdeutschland (electrolysis corridor Eastern Germany) to build a capacity of 210 MW. This will enable the production of 35,000 tonnes of e-kerosene per year. This project also uses only renewable electricity for the production of 40 tonnes of green hydrogen per day, the consortium states, which requires that another 300 tonnes of CO2 per day be sequestered.
The partner network Doing Hydrogen
Concrete Chemicals as well as Elektrolyse-Korridor Ostdeutschland are part of the IPCEI partnership project Doing Hydrogen. During construction of the pipeline from Rostock to Sachsen, all components of an H2 value chain will be covered. The resulting transmission system is to be built by 2026, two-thirds by conversion of existing natural gas infrastructure and one-third by the construction of new complementary hydrogen lines. In this way, a starter grid with a total length of 475 kilometers will arise that connects production and use points in Mecklenburg-Vorpommern, Brandenburg, Sachsen, Sachsen-Anhalt and Berlin.
The e-kerosene is then also to be certified for use in aircraft, since no alternative propulsion systems in the aviation sector are in sight for the foreseeable future. Through PtL, fuel of exactly the same specifications as petroleum-based kerosene can be created. With this, no modification of the existing drive technologies is needed. The three companies want to meet the criteria for aviation fuel set out in the EU directive RED II. Fuel having the prescribed minimum percent of PtL kerosene to be blended can be achieved this way.
The market for e-kerosene
The EU proposal ReFuelEU Aviation represents a first step towards the decarbonization of air transport. At the same time, it should ensure the purchase of synthetic fuels such as e-kerosene. At EU level, the regulation includes a sub-quota of 0.7 percent synthetic fuel out of the required quota of sustainable fuels for year 2030. The quota is to rise to a minimum of 28 percent e-fuels by 2050. “In this way, demand is plannable and ensured,” states Enertrag speaker Matthias Philippi.
Furthermore, under the German fuel blending regulation (Beimischungsverordnung), the fuel for all aircraft refueling in Germany will need to contain at least 0.5 percent PtL kerosene starting as early as 2026, and 2 percent starting 2030. This should increase the share of renewable energy in the transport sector to 28 percent by 2030.
The market ramp-up of electrolysis is a significant constraining factor for the mass production of green hydrogen. In an article that appeared recently in Nature Energy we analyzed possible pathways for expanding electrolyzer capacity in the European Union and around the world (Odenweller et al., 2022). Using a technology diffusion model we showed that the market ramp-up needs time in spite of initial exponential growth. Even if electrolysis expands as rapidly as photovoltaics and wind energy – the reigning growth champions – there will still be a short-term lack of green hydrogen and its availability in the long run remains uncertain. Nevertheless, it is important to accelerate the ramp-up now in order to ensure ambitious 2030 expansion targets can be reached and to guarantee long-term availability.
Because electrolysis is a key technology for the production of green hydrogen, the market ramp-up of electrolyzer capacity represents a critical area of constraint (IRENA, 2020). The magnitude of the scaling required is enormous, since at the end of 2021 only around 600 megawatts of electrolyzer capacity were in operation worldwide. To meet the 3,670-gigawatt figure in 2050 that the International Energy Agency (IEA) says is needed to achieve net-zero, capacity must be increased 6,000-fold (IEA, 2022b), thereby dwarfing the tenfold expansion in renewable energy capacity that will likewise be required.
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Furthermore, electrolysis expansion poses a coordination challenge in terms of ensuring that not just the hydrogen supply but also the demand and infrastructure for hydrogen are driven up simultaneously. This is the proverbial “three-sided chicken-and-egg problem” of ramping up the hydrogen market (Schulte et al., 2021).
In the following we summarize the key results of our recently published article on scaling up electrolysis (Odenweller et al., 2022). Our synopsis shows updated figures and results based on the most recent version of the IEA Hydrogen Projects Database as of October 2022 (IEA, 2022a).
Announced electrolyzer projects
The years ahead are due to see a pronounced upswing in project announcements (see fig. 1). If all the projects announced come to fruition, electrolyzer capacity in the European Union will increase by a factor of 28 by the year 2024 compared with the year 2021; globally it will grow by a factor of 23. However, this positive outlook comes with the caveat that final investment decisions have yet to be made for over 80 percent of these project announcements. Consequently there is a large degree of uncertainty about how many projects will be realized in the short term and therefore whether sufficient green hydrogen will be made available in time to reach net-zero.
We therefore asked the following question in the main scenario outlined in our article: “What would happen if electrolysis expands as quickly as photovoltaics or wind energy in its boom phase?” To cover unavoidable uncertainties we used a model to simulate and then aggregate the technology diffusion of electrolyzers in response to thousands of different parameter constellations (see box).
In the event that electrolyzer capacity expands just as rapidly as photovoltaics and wind energy once did – the two greatest success stories for the energy transition thus far – the primary outcome can be encapsulated as follows: short-term scarcity, long-term uncertainty.
Methodology: technology diffusion model
New technologies usually penetrate markets in the form of an S-curve. In this situation, there is an initial period of exponential growth which is followed by a virtually linear increase in the growth phase before growth diminishes in the saturation phase and approaches the peak. In our article we extended this standard model of technology diffusion by deploying a stochastic uncertainty analysis. We considered uncertain parameters to be (i) the electrolyzer capacity in the near future, specifically in the year 2024, (ii) the initial exponential growth rate and (iii) the demand for green hydrogen, for which we assumed a continuous increase based on policy targets and net-zero scenarios. The combined propagation of these independent uncertainties finally resulted in what we called the “probabilistic area of possibility”.
Be it fuel cells or hydrogen engines, (almost) all major commercial vehicle manufacturers are putting their efforts into hydrogen propulsion. A fact that has so far largely gone unnoticed by the average person. While the public debate still rages around the use of hydrogen in the automobile industry, it would seem the trucking sector made up its mind long ago: There’s no future without hydrogen. This was proved beyond doubt at Germany’s IAA international motor show for commercial vehicles which ran from Sept. 20 to 25, 2022, in Hannover, even if about 90 percent of the vehicles exhibited still had diesel engines.
The trend toward electrification was abundantly clear in every corner of IAA Transportation. While the roughly 1,400 exhibitors still earn their crust from diesel vehicles, the electromobility theme lends itself perfectly to marketing campaigns. Many booths took the opportunity to play around with the concept – as was the case at the IAA car show several years ago. When questioned, however, it immediately becomes apparent that electric vehicles are little more than a glint in the eye for the commercial vehicle sector. Significant volumes are still some way off – not just because of a shortage of staff and electronic chips, but also due to regulatory or technical hurdles.
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One exhibitor, for example, explained that trucks with hydrogen engines cannot be classified as zero-emission vehicles since the intake air ends up being measured alongside the exhaust during emissions testing, and this incoming air usually contains pollutants. Automotive supplier Mahle reports that popular electric engines often drop to 60 percent power output after one minute at maximum power. Unlike its own modules which can guarantee a continuous output of 92 percent (240 kilowatts).
An added issue is that fuel cell units experience cooling problems when, say, a 40-ton truck needs to travel over the Alps, therefore requiring a high level of power over a prolonged period. This is where hydrogen engines have the upper hand. On the downside, however, are the high temperatures that combustion entails as these create favorable conditions for the production of nitrogen oxides. While nitrogen oxide emissions can be significantly reduced using a catalytic converter, it doesn’t eliminate them completely – a contrast to a purely electric vehicle which has zero local emissions.
Comeback of the hydrogen ICE
The key topic of the moment for the hydrogen sector when it comes to commercial vehicles is the hydrogen internal combustion engine. Keyou, which currently employs 70 members of staff, has been working on it for years. Nothing new there. But now the likes of Cummins, Daimler, Iveco, MAN and even Unimog (to name but a few) are also busy exploring this area of technology. The question posed by Jürgen Nadler, chief marketing officer at Keyou, is telling: “Do you know anyone who’s not working on it?”
The reason for the hydrogen ICE’s dramatic comeback is said to be the “extremely high number of requests.” This has led Keyou to adjust its strategy. From now on the Bavarian technology company is focusing on the conversion of existing vehicles based on the Mercedes Actros. “We are moving away from OEM and toward end customers,” said Nadler. Initial trials with its hydrogen truck are planned from summer 2023, with the expectation that a small fleet of eight vehicles will be ready for testing by the end of the year. In 2024 the number of shipments could increase to as many as 50. By then the retrofit time should be around the three-week mark. Keyou’s engine of choice for its refitting work is a Deutz. Its ability to power buses was demonstrated by Keyou using a Solaris model, also on display in Hannover, which was converted by the Paul Group.
Last fall heralded the start of a new era in Germany’s hydrogen events sector. The trade fair and conference once known as f-cell, organized by Peter Sauber Messen und Kongress for over two decades, took place in Stuttgart on October 4 and 5 – this time under the sole direction of exhibition center operator Messe Stuttgart. The venue, located right next to the city’s airport, welcomed 60 speakers presenting the latest developments as well as 126 exhibitors who displayed their products across 5,000 square meters (53,800 square feet) of floor space. Given the ever-increasing number of hydrogen events and destinations, however, the key question is whether the city of Stuttgart, and the state of Baden-Württemberg in general, can keep pace with the competition.
The opening address signaled the official start of the conference under its new name of hy-fcell, the “hy” prefix added to demonstrate the equal footing given to hydrogen and fuel cells at the event. In future this new title will be used for international expos and conferences in a variety of locations – for example in Saudi Arabia which will play host from March 6 to 8, 2023. This arrangement was put in place as part of the visit by German Chancellor Olaf Scholz to the Middle Eastern nation.
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As well as switching to a new venue in Stuttgart, the events program had also undergone a shake-up. Things kicked off the evening before the opening with a tour of local bars and eateries where participants who had arrived early could meet in a relaxed atmosphere. At the end of the first day of the conference, a dedicated Networking Night was held directly at the trade fair in the International Congress Center Stuttgart (ICS). The hy-fcell awards in three categories were presented during the opening ceremony.
Running in parallel to the conference was the new Speakers’ Corner stage. The main sponsor of hy-fcell, the US federal state of New Mexico, was one of the presenters that took to the podium and invited potentially interested parties to establish the region as a hydrogen hub in the United States. Mark Roper from the Economic Development Department had traveled to the event especially, bringing with him a delegation that included Cabinet Secretary Alicia Keyes and members of the management team from Pajarito Power and Universal Hydrogen.
For several years from 2008 onward, the f-cell was held at Stuttgart’s exhibition center under the umbrella of the Battery&Storage show – with Messe Stuttgart serving as co-organizer. Despite trying a range of different formats over a number of years, a critical mass of exhibitors failed to materialize at that location and Peter Sauber returned to the Haus der Wirtschaft building in the city center in 2018. Now Messe Stuttgart has started afresh, ensuring plenty of time for preparation, and has managed to achieve a breakthrough by attracting over 2,000 attendees to booked-out halls at the original exhibition center, as Stefan Lohnert, president of Messe Stuttgart, reported. He said: “I’m particularly delighted by the international reach of hy-fcell – with exhibitors and speakers from around the world and a notable 20 percent proportion of international visitors.”
Concern for Stuttgart as a trade fair destination
To date, Baden-Württemberg and the metropolitan region of Stuttgart has played a globally important role in the automotive sector – as well as in the expanding area of hydrogen and fuel cells. Yet Andre Baumann, state secretary of Baden-Württemberg’s environment ministry, sees this position under threat. As he remarked in his speech, he has watched the decline of the coal industry in Nordrhein-Westfalen with concern, saying: “If we don’t want to become the Ruhr region of the 21st century, we need to be linked up to the hydrogen infrastructure.”
He expressed his hope that the area would be connected to the European Hydrogen Backbone system. Nevertheless this is some way off, he continued, since Germany’s northern states openly admit they will make locally produced green hydrogen available to their own industries first before transporting it south. “Not that we’re being left behind.” However something needs to be done in the weeks and months ahead, urged Baumann.
In summer 2022, the German government passed its Easter Package of energy policy amendments designed to accelerate the expansion of renewable energies, a move that it hopes will foster substantial innovation in hydrogen projects. According to the new raft of measures, tenders for inventive concepts that incorporate hydrogen-based electricity storage will be started at the end of this year. The tenders are expected to provide support for schemes with plant combinations comprising onshore wind turbines or solar plants that feature hydrogen as a storage gas and that will feed power into the grid via a common interconnection point. Note that this will exclusively apply to electrolytic hydrogen that is used for electricity generation. It is expected that 400 megawatts of installed capacity will be initially put out for tender in 2023. This figure is then set to increase every year, reaching 1,000 megawatts by 2028.
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