Germany to give low-carbon hydrogen ‘overriding public interest’ in bid to ramp up market

Germany will in future classify hydrogen production as being of “overriding public interest” in a bid to facilitate the licensing and implementation of new projects, energy policy newsletter Tagesspiegel Background reported. The coalition government parties agreed to expand the country’s hydrogen acceleration act to not only cover "green hydrogen" made with renewable energy sources but also include so-called “blue hydrogen,” produced from fossil gas using carbon capture and storage (CCS).

The amended law, seen by the publication, is expected to be approved by parliament on Wednesday (25 February). 

Energy industry association BDEW and the German Chambers of Industry and Commerce (DIHK) had advocated for extending the law to also include hydrogen derived from non-renewable sources, known as low-carbon hydrogen. They argued that this was essential to ramp up the hydrogen economy and transform industry already before enough additional renewable energy sources are available to produce adequate amounts of green hydrogen. 

Environmental organisations, however, warned against extending the law to include blue hydrogen, arguing that it would further consolidate fossil fuel dependencies.

In the fight against climate change, green hydrogen is seen as a crucial tool for reducing emissions in hard-to-abate sectors, such as heavy industry and aviation. However, an early green hydrogen hype in Germany and Europe has run into serious headwinds due to high costs and a slow uptake in demand.

Germany is failing on its targets to expand the hydrogen economy, with both supply and demand remaining well below expectations. Despite billions in subsidies, the government so far has not achieved the goals set out in its hydrogen strategy – and is unlikely to do so in the near future, the Federal Court of Auditors said in a special report assessing progress and challenges in establishing a hydrogen economy in the country.