The National Hydrogen Strategy - BMBF

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The National Hydrogen Strategy - BMBF
The National
Hydrogen Strategy

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Federal Ministry for Economic Affairs and Energy
Public Relations Division
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Current as at
June 2020

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Content
Content 1

I.	Recognising the potential and harnessing the opportunities of hydrogen                                                                                                                                                                                                                                                        .....................................................................................   2

II.	The National Hydrogen Strategy – goals and ambitions                                                                                                                                                                                     .......................................................................................................................................................................     5
     Assuming global responsibility                                                                                     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
     Making hydrogen a competitive option                                                                                                                       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
	Developing a domestic market for hydrogen technology in Germany, paving the
     way for imports                             ....................................................................................................................................................................................                                                                                                                                                                                     5
     Establishing hydrogen as an alternative for other energy sources                                                                                                                                                                                                                    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6
     Making hydrogen a sustainable base material for the industrial sector                                                                                                                                                                                                                                       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6
     Enhancing transport and distribution infrastructure                                                                                                                                                                         . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6
     Fostering science, mobilising skilled labour                                                                                                                                   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
     Shaping and accompanying transformation processes                                                                                                                                                                                . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
	Strengthening German industry and securing global market opportunities for
     German firms                       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
     Establishing international markets and cooperation for hydrogen                                                                                                                                                                                                                        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
     Regarding global cooperation as an opportunity                                                                                                                                                       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
	Building up and securing the quality assurance infrastructure for hydrogen p
     roduction, transport, storage and use, and building trust                                                                                                                                                                                    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
	Improving the policy environment and addressing current developments on an
     ongoing basis                      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8

III.	Hydrogen: status quo, fields of action, and markets of the future                                                                                                                                                                                                                        ....................................................................................................................... 9
      The status quo and expected trends for hydrogen and its downstream products                                                                                                                                                                                                                                                                                ............................                          9
      Hydrogen as a collaborative European project                                                                                                                                              . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     10
      International trade                                       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     11
      Transport and distribution infrastructure in Germany and abroad                                                                                                                                                                                                                     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     11
      Research, education, innovation                                                                                         . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     12

IV.	Governance for the National Hydrogen Strategy                                                                                                                                                             .................................................................................................................................................................................................      14
     Cooperation between the Federal Government and the Länder                                                                                                                                                                                                                   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    15

V.	Action Plan: steps necessary for the National Hydrogen Strategy to succeed                                                                                                                                                                                                                                                                    ................................................................    16
    Hydrogen production                                                      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    16
    Fields of application                                             . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     17

VI. Glossary   ...............................................................................................................................................................................................................................................................................................................................................................................................        28
2

I.	Recognising the potential and harnessing
    the opportunities of hydrogen
The energy transition – which represents the efforts               #   Hydrogen is an energy storage medium that
undertaken and results achieved on renewable energy                    allows for renewable energy to be stored in a sup-
expansion and energy efficiency – is our basis for a                   ply-based and flexible manner and therefore helps
clean, secure and affordable energy supply, which is                   balance energy supply and demand. This makes
essential for all our lives. By adopting the 2030 Climate              hydrogen an important ingredient of the energy
Action Plan, the Federal Government has paved the                      transition.
way for meeting its climate targets for 2030. Its long-
term goal is to achieve carbon neutrality in line with             #   Hydrogen plays a key role for sector coupling. In
the targets agreed under the Paris Agreement, which                    areas where renewable electricity cannot be used
seeks to keep global warming well below 2 degrees                      directly, green hydrogen and the products derived
and if possible below 1.5 degrees. In addition, Germany                from it (power-to-X) open up new ways to decar-
has committed itself, together with the other European                 bonise our energy supply.
Member States, to achieving greenhouse gas (GHG)
neutrality by 2050. Apart from phasing out coal-fired              #   Already today, many chemical and industrial pro-
power, for which Germany has already taken the rel-                    cesses depend on the use of hydrogen. For exam-
evant decisions, this means preventing emissions                       ple, it is used as a base substance for producing
which are particularly hard to reduce such as process-                 ammonia. Going forward, the fossil-based hydro-
rela­ted GHG emissions from the industrial sector.                     gen currently used for this is to be replaced by
                                                                       green hydrogen. In addition, hydrogen in its pure
In order for the energy transition to be successful,                   form can be used to decarbonise a wide range of
security of supply, affordability and environmental                    industrial production processes for which cur-
compatibility need to be combined with innovative                      rently no decarbonisation technologies are avail­
and smart climate action. This means that the fossil                   able. For example, in order to allow for the GHG-
fuels we are currently using need to be replaced by                    free production of primary steel, hydrogen is
alternative options. This applies in particular to gas­                currently considered to be the most promising
eous and liquid energy sources, which will continue                    solution for replacing hard-coal coke.
to be an integral part of Germany’s energy supply.
Against this backdrop, hydrogen1 will play a key role              #   Hydrogen will be required if certain types of car-
in enhancing and completing the energy transition.                     bon emissions from the industrial sector such as
                                                                       process-related emissions from the cement indus-
#   Hydrogen can be used as an energy source. For                      try are to be eliminated in the long term. By cap-
    example, it can be used in fuel cells to drive for-                turing carbon emissions from the industrial sector
    ward hydrogen-powered transport or as a means                      and combining these with hydrogen, useful chem-
    to produce synthetic fuels.                                        icals can be produced (CCU) and new value chains
                                                                       for the basic chemicals industry opened up.

                                                                   In order to make hydrogen a key element of our decar-
                                                                   bonisation strategy, our entire value chain – from

1   The Federal Government considers only hydrogen that has been produced using renewable energy (green hydrogen) to be sustainable
    in the long term.
I. RECOGNISING THE POTENTIAL AND HARNESSING THE OPPORTUNITIES OF HYDROGEN                 3

technologies, generation, storage, infrastructure and     600 million euros will be provided between 2020 and
use, including logistics and important aspects of qual-   2023 to foster the ‘Regulatory Sandboxes for the
ity assurance – need to be looked at.                     Energy Transition’, which help speed up the transfer
                                                          of technology and innovations from the lab to the
In order for Germany to become GHG-neutral and            market, not least for hydrogen solutions. As part of
meet its international obligations under the Paris        Germany’s decarbonisation programme, funding is
Agreement, hydrogen needs to be established as a          provided for investment in technologies and large-
decarbonisation option. The Federal Government            scale industrial facilities which use hydrogen to
considers only hydrogen that has been produced            decarbonise their manufacturing processes. More
using renewable energy (green hydrogen) to be sus-        than 1 billion euros will be provided for this between
tainable in the long term. The Federal Government         2020 and 2023. There are also programmes that pro-
therefore seeks to use green hydrogen, promote its        mote the use of hydrogen in manufacturing and for
rapid market rollout and establish the necessary value    the purpose of eliminating and utilising carbon emis-
chains. The Federal Government believes that both a       sions in the base materials industry. These seek to
global and European hydrogen market will emerge in        encourage the industry to invest in hydrogen solu-
the coming ten years and that carbon-free (for exam-      tions. On 3 June 2020, the Coalition Committee
ple blue or turquoise) hydrogen will be traded on this    adopted a ‘package for the future’ which makes avail-
market. Given Germany’s close integration in the          able another 7 billion euros for speeding up the mar-
European energy supply infrastructure, carbon-free        ket rollout of hydrogen technology in Germany and
hydrogen will be relevant for Germany and, if avail­      another 2 billion euros for fostering international
able, will be temporarily used.                           partnerships. The precise amounts available for each
                                                          of these programmes depend on the budget estimates
In addition to this, hydrogen creates fresh potential     made by the responsible ministries.
for industrial policy and can help the German and
European economy deal with the consequences of the        A considerable increase in the demand for hydrogen
coronavirus pandemic. The National Hydrogen Strat-        is expected in the medium to long term. In order to
egy therefore also seeks to use the economic opportu-     harness the full potential of hydrogen technology, the
nities opening up as a result.                            next steps need to be taken to speed up the rollout of
                                                          this technology together with the private sector. The
The Federal Government has been aware of the poten-       National Hydrogen Strategy provides the basis for pri-
tial of hydrogen technology for many years. Between       vate-sector investment in hydrogen generation that is
2006 and 2016, around 700 million euros in funding        both economically viable and sustainable, and in its
was approved under the National Innovation Pro-           transport and use.
gramme on Hydrogen and Fuel Cell Technology, and
between 2016 and 2026, a total of 1.4 billion euros in    Considering the status quo, it is unlikely that the large
funding will be provided. In addition to this the Fed-    quantities of hydrogen that will be needed for the
eral Government has made use of the financial             energy transition can be produced in Germany alone,
resources provided under the Energy Research Pro-         as Germany’s renewable energy generation capacity is
gramme to build an excellent research landscape.          limited. This means that Germany will continue to
Between 2020 and 2023, 310 million euros will be pro-     import much of its energy from abroad. We will foster
vided under the Energy and Climate Fund for prac-         and intensify international cooperation and partner-
tice-oriented basic research on green hydrogen and        ships on hydrogen.
there are plans to provide another 200 million euros
over this period to strengthen practice-oriented          Hydrogen has gained in importance on the European
energy research on hydrogen technology. In addition,      and international agenda in the last few years. In Sep-
4     I . R E CO G N I S I N G T H E P OT E N T I A L A N D H A R N E S S I N G T H E O P P O RT U N I T I E S O F H Y D R O G E N

tember 2018, the Federal Government together with
27 other European nations and the European Com-
mission adopted a European hydrogen initiative and
declared hydrogen technology and systems a value
chain of strategic interest. The Federal Government
will make use of this momentum to continue to
advocate hydrogen technology during its upcoming
Presidency of the Council of the EU and in line with
the principles set out in this strategy.

It will be for the competent ministries to ensure that
the measures are implemented and financed on the
basis of the existing budget estimates and financial
plans.
5

II.	The National Hydrogen Strategy –
     goals and ambitions
By tabling the National Hydrogen Strategy, the Fed-                    Developing a domestic market for
eral Government is providing a coherent framework                      hydrogen technology in Germany,
for the generation, transport and use of hydrogen,
                                                                       paving the way for imports
encouraging the relevant innovations and invest-
ment. The Strategy sets out the steps that are needed
to meet the German climate targets, create new value                   The first step that needs to be taken to speed up the
chains for the German economy and foster energy                        rollout of hydrogen technology is establishing a strong
policy cooperation at international level. It focuses in               and sustainable domestic market for the production
particular on the following goals:                                     and use of hydrogen at home. A strong domestic mar-
                                                                       ket will send an important signal, encouraging other
                                                                       countries to use hydrogen technology as well. Ger-
Assuming global responsibility                                         many will design the incentives for speeding up the
                                                                       rollout of hydrogen technology in Germany and par-
The Federal Government recognises Germany’s respon-                    ticularly for the establishment and operation of elec-
sibility to reduce greenhouse gas emissions globally.                  trolysers in a way that is compatible with the energy
By developing the hydrogen market and promoting                        transition.
hydrogen as a decarbonisation option, our country
can make a key contribution to climate change miti-                    The Federal Government expects that around 90 to
gation around the world.                                               110 TWh of hydrogen will be needed by 2030. In order
                                                                       to cover part of this demand, Germany plans to estab-
                                                                       lish up to 5 GW of generation capacity including the
Making hydrogen a competitive                                          offshore and onshore energy generation facilities
option                                                                 needed for this. This corresponds to 14 TWh 2 of green
                                                                       hydrogen production and will require 20 TWh of
The current framework does not allow hydrogen to                       renewables-based electricity. It needs to be ensured
be generated and used in an economically viable                        that the demand for electricity that is created by the
manner. Fossil fuels in particular continue to be much                 electrolysers will not lead to an increase in carbon
cheaper as the cost of carbon emissions is not included                emissions. The Federal Government has included a
in their price. In order for hydrogen to become eco-                   monitoring mechanism in the National Hydrogen
nomically viable, we need to continue to bring down                    Strategy which will be used to track the development
the price of hydrogen technology. In order to drive                    of green hydrogen demand in detail. An additional 5
forward technological progress and economies of                        GW of capacity are to be added, if possible by 2035 and
scale and promptly obtain the critical mass of hydro-                  no later than 2040.
gen needed for some initial sectors to switch to the
new technology, the production and use of hydrogen                     However, the domestic generation of green hydrogen
need to be sped up globally. A particular focus is being               will not be sufficient to cover all new demand, which
placed on areas that are already close to commercial                   is why most of the hydrogen needed will have to be
viability and where major path dependencies can be                     imported. There are several places across the EU where
avoided, or which cannot be decarbonised in other                      large quantities of renewables-based electricity are
ways, as is the case for process-related emissions in                  being generated. These offer great potential for pro-
the steel or chemicals industry, or in certain parts of                ducing green hydrogen. The Federal Government will
the transport sector. In the longer term, parts of the                 work to ensure that this potential is tapped and that
heat market will also be focused on.                                   the generation capacities are further expanded. To this

2   Assumption: 4,000 hours full-load hours of electrolyser operation and an efficiency ratio of 70%.
6     I I . T H E N AT I O N A L H Y D R O G E N S T R AT E G Y – G O A L S A N D A M B I T I O N S

end, it will intensify its cooperation with other Euro-                         tems for the defence of our country and the Alliance,
pean Member States, particularly those bordering the                            and maritime transport, where many routes and
North and Baltic Sea, but also with the countries of                            applications cannot be operated using electricity
southern Europe. The use of offshore wind energy                                alone. This is why the fossil input and fossil fuels need
will play an important role. The Federal Government                             to be replaced by renewables-based alternatives, for
will work with the North and Baltic See border states                           example jet fuel produced through PtX.
to push forward hydrogen production by establishing
a reliable regulatory framework for offshore wind
energy. It also aims to systematically develop produc-                          Making hydrogen a sustainable base
tion sites in other partner countries, for example as                           material for the industrial sector
part of development cooperation. The Federal Gov-
ernment seeks to provide suppliers, consumers and                               Hydrogen is an important base material for the German
investors in Germany and abroad with the security to                            industrial sector (it is used for example in the chemi-
plan ahead.                                                                     cals industry or steel production). Around 55 TWh of
                                                                                hydrogen – most of it produced from fossil energy
This will require working with the relevant partner                             sources – is used for industrial applications in Ger-
countries to launch an investment and innovation                                many each year. These need to switch to a production
campaign. The Federal Government will use its                                   based on green hydrogen to the extent possible. In
Hydrogen Strategy to promote the establishment of                               addition to this, hydrogen and hydrogen-based PtX
production capacity and new supply chains and pro-                              commodities need to be used to drive forward the
vide our partner countries with the relevant technol-                           decarbonisation of emission-intensive industrial pro-
ogy and targeted solutions. This will boost employ-                             cesses, which will open up new fields of application
ment both in Germany and our partner countries and                              for hydrogen and PtX commodities. For example, it
pave the way for long-term economic growth.                                     is estimated that more than 80 TWh of hydrogen
                                                                                would be needed to make German steel production
The Action Plan for the National Hydrogen Strategy                              GHG-neutral by 2050. Around 22 TWh of green
and the current budget and financial estimates serve                            hydrogen would be needed for German refinery and
as the basis for speeding up the rollout of hydrogen                            ammonia production to switch to hydrogen. Germa-
technology. Should it become clear that the demand                              ny’s industrial sector already has demand for hydro-
for hydrogen will develop more strongly than                                    gen and this demand is expected to grow heavily in
expected, the National Hydrogen Strategy will be                                the future. This means that the industrial sector is
enhanced as part of the evaluation process.                                     well-placed to become one of main factors speeding
                                                                                up the market rollout of hydrogen and a global pio-
                                                                                neer for hydrogen technology.
Establishing hydrogen as an alterna­
tive for other energy sources
                                                                                Enhancing transport and distribution
Hydrogen technology and the alternative sources of                              infrastructure
energy derived from it are an integral part of the
energy transition and contribute to its success. Some                           Developing and putting in place the right transport
sectors such as air and maritime transport or indus-                            and distribution infrastructure is key in order to be
tries in which process-related emissions are unavoid-                           able to import and develop the sales markets for
able will be impossible or very difficult to electrify,                         hydrogen and the products derived from it. Germany
even in the long term. This applies in particular to                            has a well-developed gas infrastructure consisting of
aviation, parts of heavy-duty transport, mobile sys-                            a tightly-knit natural gas network and the gas storage
II. THE NATIONAL HYDROGEN STRATEGY – GOALS AND AMBITIONS            7

units connected to it. In order to harness the full         tists and the general public to look at how hydrogen
potential of hydrogen, we will enhance our transport        can make a contribution to the energy transition. We
and distribution infrastructure and continue to             will start a dialogue process to accompany the neces-
ensure that the use of hydrogen applications is safe.       sary transformations and provide assistance to the
This includes building and expanding a dedicated            stakeholders where necessary.
hydrogen network. The Federal Government will
revisit and develop the regulatory framework and the
technical requirements for the gas infrastructure. For      Strengthening German industry and
example, it will examine whether natural gas pipe-          securing global market opportunities
lines which are no longer needed to transport natural
gas (for example L gas) can be converted into hydro-
                                                            for German firms
gen infrastructure and investigate whether the com-
patibility of existing or upgraded gas infrastructure       Germany now has the chance to play a key role in
with hydrogen can be ensured.                               international competition for the development and
                                                            export of hydrogen and Power-to-X (PtX) technolo-
                                                            gies. The broad-based community of German stake-
Fostering science, mobilising skilled                       holders in the hydrogen technology field, with their
labour                                                      good international connections, will not only be a
                                                            key factor for the successful market ramp-up of
Research is a strategic element underpinning energy         hydrogen technologies in Germany, but will also
and industrial policy. Only by developing long-term         improve the opportunities of German firms on this
research and innovation programmes that cover the           forward-looking market. The manufacture of compo-
entire hydrogen value chain – from storage, transport       nents for the generation and use and for the supply
and distribution all the way to its use – will it be pos-   of hydrogen will contribute to regional value crea-
sible to establish hydrogen as a key technology for the     tion and strengthen the companies active in these
energy transition. Hydrogen solutions need to be sys-       fields. For this to happen, attention is being paid in
tematically developed to the stage of practical use at      the implementation of the hydrogen strategy and in
industrial scale by 2030. In order to further strengthen    particular in the funding measures to ensuring that
the good position of German companies and research          all of Germany’s regions benefit from the new poten-
institutes on hydrogen, we should recruit, train and        tial for growth deriving from the hydrogen economy.
foster outstanding scientists, new talent and skilled       The fostering of the market ramp-up of hydrogen
staff and engage in close dialogue with other leading       technologies also makes an important contribution
research nations. The government also plans to place        towards coping with the economic impact of the
a stronger focus on establishing new research insti-        coronavirus pandemic, and lays a further foundation
tutes, setting up centres of excellence and building        stone for a sustainable orientation of German indus-
educational and research capacity aimed at regions          try.
which are particularly affected by structural change.

                                                            Establishing international markets
Shaping and accompanying                                    and cooperation for hydrogen
transformation processes
                                                            We need to prepare the future supply of hydrogen
The energy transition and the increased use of renew-       and its downstream products and design it to be sus-
able energy mean that all stakeholders need to adapt        tainable. This is because, in the medium to long term,
in many ways. We will work with businesses, scien-          Germany will import substantial quantities of hydro-
8     I I . T H E N AT I O N A L H Y D R O G E N S T R AT E G Y – G O A L S A N D A M B I T I O N S

gen. We share with other future importers an interest                           Building up and securing the quality
in the swiftest possible establishment of a global                              assurance infrastructure for hydrogen
hydrogen market. In view of their potential for
                                                                                production, transport, storage and
renewable energy, the countries currently producing
and exporting fossil fuels also have attractive oppor-                          use, and building trust
tunities to convert their supply chains to the use of
renewable energy and hydrogen, and thus to become                               The special physical and chemical properties of
potential suppliers of hydrogen. In this way, these                             hydrogen mean that a robust quality assurance infra-
countries will be also able to benefit in the long term                         structure for the development and in particular the
from existing trade relations. Here, it is important to                         monitoring of facilities to produce, transport, store
ensure that local markets and a local energy transi-                            and use hydrogen is essential. The chief components
tion in the partner countries are not impeded, but are                          of this measurement and quality assurance infra-
fostered by the production of hydrogen.                                         structure which needs to be built up and networked
                                                                                at national and European level are metrology and
International trade in hydrogen and synthetic down-                             physical and chemical safety technology. In particular,
stream products will not only create new trade rela-                            there is a need for scientifically accepted and regu-
tions for Germany and the EU, but also facilitate a                             lated measurement methods and assessment criteria,
further diversification of energy sources and trans-                            and internationally accepted standards and technical
port routes, and will thus improve the security of sup-                         standards. Further to this, a high level of safety needs
ply. International trade in hydrogen and its down-                              to be established. Negative events and accidents can
stream products will thus become a significant indus-                           undermine public acceptance of hydrogen technol-
trial and geopolitical factor which creates a need for                          ogy. There is a need to build trust amongst the users.
strategic objectives and decisions, but also offers fresh
opportunities for all sides.
                                                                                Improving the policy environment
                                                                                and addressing current develop­
Regarding global cooperation as an                                              ments on an ongoing basis
opportunity
There is a sense around the world that hydrogen tech-                           The implementation and further development of the
nologies are on the verge of exciting progress, and we                          National Hydrogen Strategy is an ongoing process.
wish to work with our partners around the world to                              The status of implementation and target achievement
utilise this positive mood and make rapid technologi-                           is subject to regular review by a new committee of
cal progress. At international level, the cooperation                           state secretaries for hydrogen from the various minis-
with potential suppliers and other importers pro-                               tries; this body will also decide on the further devel-
motes their contribution towards climate change mit-                            opment and implementation of the Strategy. The
igation and creates opportunities for sustainable                               state secretaries’ committee is supported and advised
growth and development. Possibilities for joint pro-                            by a National Hydrogen Council with high-level
jects and trialling of technology exist in the area of                          experts from science, business and civil society. The
the North Sea and in southern Europe in particular,                             Strategy will be subject to a first evaluation after three
and also in the context of the Federal Government’s                             years. On this basis, the Federal Government will then
energy partnerships and cooperation with the partner                            consider the further development of the Strategy,
countries in German development cooperation.                                    including the necessary measures for this.
´     9

III.	Hydrogen: status quo, fields of action, and
     markets of the future
The status quo and expected                                   ios analysed by various studies that consider the effects
trends for hydrogen and its down­                             on the entire energy system in the case of a 95% reduc-
                                                              tion of GHG emissions against the 1990 baseline, the
stream products                                               forecast consumption of electricity-based energy
                                                              sources in 2050 will be between 110 TWh (Klima­
Domestic hydrogen consumption currently amounts               schutzszenarien [Climate Action Scenarios] by the
to roughly 55 TWh. The greatest demand for hydro-             Federal Ministry for the Environment, Nature Con­
gen is linked to material production processes in             servation and Nuclear Safety) and roughly 380 TWh
industry and is evenly distributed between the basic          (Klimapfade [Climate Paths] by the BDI, the Federa-
chemicals (production of ammonia, methanol, etc.)             tion of German Industries). Alongside the industrial
and petrochemicals sector (production of conven-              and transport sectors, long-term demand will also
tional fuels). The bulk of the hydrogen being used in         arise in the transformation sector. The shape of the
these processes is ‘grey’ hydrogen. About 7% of               future policy framework, particularly as regards cli-
demand (3.85 TWh) is being met via electrolysis (chlo-        mate action ambitions and the attendant strategies
ralkali) processes. Since some of the hydrogen used in        being pursued, will have a decisive impact on the
the petrochemicals industry, in particular, does not          development of overall demand and consumption
have to be produced from scratch, but is available as a       levels in the individual sectors.
by-product of other processes (e.g. catalytic reform-
ing), the current level of hydrogen consumption of            The National Hydrogen Strategy is targeted at the fol-
around 55 TWh cannot entirely be substituted with             lowing strategic markets of the future:
‘green’ hydrogen.
                                                              Hydrogen production
The future development of the hydrogen market in
Germany, but also globally, will fundamentally                To enable the market penetration and export of
depend on the level of ambition displayed by climate          hydrogen technologies, a domestic market is indis-
action policy and the attendant strategies being pur-         pensable – one that provides a strong and sustainable
sued. In the light of the Paris Agreement and the Fed-        base for the production and use of hydrogen while
eral Government’s commitment to the goal of achiev-           furthering the energy transition. If hydrogen is to
ing greenhouse gas neutrality by 2050, the hydrogen           have long-term prospects of being used in a sustaina-
market is likely to exhibit the following trends in the       ble and economical way, capacities for generating
future:                                                       electricity from renewables (particularly wind power
                                                              and photovoltaics) must be systematically improved.
By 2030, following market penetration, hydrogen
demand is set to experience an initial increase – espe-       Industrial sector
cially in the industrial sector (chemicals, petrochemi-
cals, steel) and, to a lesser extent, in the transport sec-   In certain industrial sectors, the transformation
tor. According to conservative estimates, the demand          towards carbon neutrality will not be possible using
in industry will rise by 10 TWh. In addition, growing         conventional technologies. In these sectors, gaseous
demand is expected to come from fuel-cell-driven              and liquid sources of energy have to be gradually
electric vehicles. Other consumers (e.g. parts of the         replaced by alternative technologies, paving the way
heating sector, in the long term) might follow.               for the use of alternative resources or processes with
                                                              either zero or very low carbon emissions. Many of
If the 2050 carbon neutrality goal is to be reached,          these processes will, in the long term, enable the use
hydrogen technologies will also have to play an               of hydrogen and products derived from it. In refiner-
important role in Germany. According to the scenar-           ies and parts of the chemical industry, in particular, it
10    I I I . H Y D R O G E N : S TAT U S Q U O, F I E L D S O F A C T I O N , A N D M A R K E T S O F T H E F U T U R E

is already possible today to substitute green hydrogen                          vehicles can complement battery-powered electric
for ‘grey’ hydrogen without any adjustments being                               mobility and help significantly reduce air pollutant
necessary. Moreover, existing infrastructures of the                            and carbon emissions. In certain segments, hydrogen
chemical industry, e.g. hydrogen networks, can con-                             may also provide an alternative for cars. If hydrogen is
tinue to be used and possibly be expanded or opti-                              to be used in road transport, refuelling infrastructure
mised for other applications such as in the steel sec-                          must be expanded as needed.
tor. For example, hydrogen will soon be used within
pilot projects in the steel industry, where it can help                         It is important to provide constructive and targeted
substitute high-emission blast furnace processes with                           support for the German automotive and supplier
the direct reduction of iron ore. The aim is, wherever                          industry as it undergoes this structural transforma-
possible, to channel upcoming investments in pro-                               tion. With a view to fuel cell technology, for example,
duction facilities on an industrial scale into climate-                         the goal is to strengthen Germany’s machinery and
friend­­ly technologies. Therefore, hydrogen is set to                          plant manufacturing sector and to aspire to global
play an important long-term role in safeguarding the                            leadership in the endeavour to improve the cost,
attractiveness of Germany’s industrial sector.                                  weight, and performance parameters of fuel cell com-
                                                                                ponents (stacks, pressure tanks, etc.).
Transport
                                                                                Heat market
Mobility applications offer great potential for hydro-
gen uses. The transport sector must be committed to                             Even after the efficiency and electrification potentials
technological progress if it is to reach the sector-spe-                        for process heat generation and the building sector
cific climate and renewables targets. Hydrogen-based                            have been harnessed, there will continue to be long-
or PtX-based mobility can be an alternative option for                          term demand for gaseous fuels. In the long run,
those applications where using electricity directly is                          hydrogen and its downstream products can help in
not reasonable or technically feasible. This includes                           various ways to decarbonise parts of the heat market.
military applications that must be able to ensure
interoperability between allies.
                                                                                Hydrogen as a collaborative
In the long term, air and maritime transport in par-                            European project
ticular will develop a demand for carbon-neutral
fuels which can be supplied in the form of hydro-                               The issues and conditions that have to be addressed
gen-based energy sources from PtX processes. Both                               in order to foster the domestic ramp-up of hydrogen
air and maritime transport rely on synthetic fuels to                           technologies and to build up an international hydro-
achieve decarbonisation. In air transport as well as                            gen market can only be successfully handled within
coastal and inland navigation, fuel cells and bat-                              the context of the European internal market and reg-
tery-powered drives may also be an option for certain                           ulatory framework. As hydrogen technologies gain
mobility needs. However, technological advances are                             ground in other EU Member States, it is becoming
still necessary in this field.                                                  increasingly important to develop a European inter-
                                                                                nal market for hydrogen. The EU benefits from the
In a wide range of sectors – such as local public pas-                          North Sea’s ideal locations for wind energy and the
senger transport (buses, trains), parts of heavy-duty                           great potential for photovoltaics and wind energy
road transport (trucks), commercial vehicles (e.g. for                          offered by southern Europe. This potential can repre-
use in construction work or agriculture and forestry)                           sent a great long-term opportunity for generating
or logistics (delivery traffic; other commercial vehicles                       renewable hydrogen. Also, Europe’s well-developed
such as forklift trucks) – the introduction of fuel cell                        gas infrastructure may provide possibilities for the
III. HYDROGEN: STATUS QUO, FIELDS OF ACTION, AND MARKETS OF THE FUTURE               11

transport of hydrogen. In order to lay the foundations         mate change mitigation, speed up the ramp-up of
for an internal market, we need a strong European              hydrogen technologies, and create opportunities for
framework. Key challenges can only be meaningfully             sustainable growth and development. It is possible,
addressed in the context of the EU. Thus, cross-border         for example, to agree on ambitious standards for cer-
collaboration is indispensable in order to find solu-          tification and for the sustainability of hydrogen pro-
tions for the generation of wind and solar energy in           duction, and to increase market volumes. Existing
the respective areas and for the distribution of hydro-        forms of collaboration, notably with the energy part-
gen. It is also essential as regards regulatory law, invest-   nerships of the Federal Government, but also with the
ment conditions, and the sharing of experience. Fur-           partner countries in German development coopera-
thermore, action at European and international level           tion or the International Climate Initiative, offer
is required to establish clear sustainability standards        prospects for joint projects and for testing import
for the production and transport of hydrogen, and to           routes and technologies. Besides these, further initia-
set the stage for the systematisation and environmen-          tives for international cooperation may emerge. Cur-
tal classification of electricity, hydrogen, and syn-          rent fossil fuel exporters may play a particularly
thetic downstream products. By starting out early to           prominent role if they offer great potential for hydro-
develop standards and a policy environment in this             gen production. In developing countries in particular,
field, the EU can play a pivotal role in shaping the           it is vital to ensure that the export of hydrogen will
basic international framework. Progress also needs to          not be detrimental to possibly inadequate energy sup-
be made on the state aid framework to take account             ply systems in the exporting countries concerned and
of the rising operating costs linked to the use of hydro-      thus incentivise local investment in even more fossil
gen in the steel and chemical industries, for example.         fuels. Therefore, the production of green hydrogen is
Germany will take on an active role in setting up a            to act as a stimulus for these countries to rapidly
market for hydrogen and establishing sustainability            expand their capacities for generating renewable
standards, share its experience with the energy transi-        energy – these will, after all, also benefit local markets.
tion, and use its Council Presidency to place a central
focus on the framework for sector coupling and the             The trade relations needed for the hydrogen market
development of an EU internal market for hydrogen.             raise complicated geopolitical questions that policy-
Within the EU, the Federal Government will advocate            makers have to address as early as possible. But they
that key aspects of this strategy influence the devel-         also provide many opportunities – for example for
opment of a European hydrogen strategy.                        expanding the EU’s internal energy market, establish-
                                                               ing new international value chains, furthering coop-
                                                               eration with those partner countries within German
International trade                                            development cooperation that offer great renewable
                                                               energy potential for PtX production, and for expand-
If Germany is to reach its climate targets for 2030 and        ing existing or creating new trade relations with
its GHG neutrality target for 2050, importing renewa-          energy exporters.
ble energy from beyond the European internal mar-
ket will become a medium and long-term necessity.
International trade in hydrogen and its downstream             Transport and distribution infra­
products is therefore a significant industrial and geo-        structure in Germany and abroad
political factor.
                                                               In order to be able to import and develop sales mar-
At international level, cooperation with potential             kets for hydrogen and its downstream products, the
suppliers and importers, if based on the partners’             right transport and distribution infrastructure, espe-
needs, can promote their contribution towards cli-             cially as regards transmission systems, must be in
12    I I I . H Y D R O G E N : S TAT U S Q U O, F I E L D S O F A C T I O N , A N D M A R K E T S O F T H E F U T U R E

place. Germany has a well-developed gas infrastruc-                             Research, education, innovation
ture consisting of a tightly-knit natural gas network
and the gas storage units connected to it. In future,                           Research is a strategic element underpinning energy
part of this infrastructure is to be usable for hydrogen                        and industrial policy. Thanks not least to the long-
as well. Further networks are to be created exclusively                         term approach and reliability of the Federal Govern-
for the transport of hydrogen. Given Germany’s geo-                             ment’s research funding, German companies and
graphical location and its role as an important transit                         research establishments are pioneering hydrogen and
country within Europe, these transformation pro-                                other PtX technologies. Across the world, German
cesses can only be successfully shaped in cooperation                           institutional funding finances outstanding research
with its European neighbours and associated third                               facilities and infrastructures and helps to transpose
countries. Consistent quality and sustainability stan­                          cutting-edge research into practice.
dards and suitable documentation procedures have to
be established not only for the production, but also                            We are committed to providing research funding for
the transport of hydrogen and associated emissions.                             key enabling technologies and new approaches that
As in other countries, building up a hydrogen market                            cover the entire hydrogen value chain – from genera-
in Germany entails technical challenges for several                             tion and storage, transport and distribution all the
components of the infrastructure and for certain                                way to application. By integrating forward-looking
devices and installations employed by end users.                                basic research with targeted application-based
That is why the necessary transformation processes                              research, we can set the stage for key enabling tech-
(‘hydrogen readiness’, etc.) must be enabled and initi-                         nologies such as electrolysis-based or bio-based pro-
ated as early as possible. In order to avoid misallo-                           cesses of hydrogen production, methane pyrolysis
cated investments, however, this transformation pro-                            (‘turquoise’ hydrogen), artificial photosynthesis, and
cess should be oriented to the demand that can be                               fuel cells. It is important to take into account the par-
expected in view of the 2050 carbon neutrality goal.                            ticularities of individual sectors such as air transport,
                                                                                maritime transport, and industry, and to harness
Especially as far as international trade is concerned,                          potential spill-over effects across the various fields of
important options for transporting hydrogen include                             application. We are also assessing the opportunities
PtX downstream products or LOHCs (Liquid Organic                                that may arise with regard to natural hydrogen
Hydrogen Carriers). Liquid hydrogen, PtL/PtG down-                              resources.
stream products, and LOHCs can be transported easily
and safely over long distances. Here, existing trans-                           We fund research in the knowledge that the findings
port capacities and the relevant infrastructure may be                          made today will be the innovations of tomorrow.
used and new capacities created (e.g. pipelines, meth-                          Bridges must be built between research and practice.
anol and ammonium tankers). Under the motto ‘Ship-                              Apart from the regulatory sandboxes for the energy
ping the sunshine’, research could provide an unprec-                           transition, we also rely on the tried-and-tested format
edented opportunity to tap new potential for the                                of collaborative projects with strong partners from
large-scale generation and transport of green hydro-                            the business and science communities. Due to the
gen. Long-distance trading of PtX products can com-                             long run-up periods from research to application, it is
plement the transport of hydrogen via pipeline sys-                             necessary to foster application-based energy research
tems. It is important to avoid greenhouse gas emis-                             so that we can reach our targets in time.
sions in connection with the transport of hydrogen.
                                                                                We are strengthening the pre-competitive coopera-
                                                                                tion between science and business also in the field of
III. HYDROGEN: STATUS QUO, FIELDS OF ACTION, AND MARKETS OF THE FUTURE   13

applied basic research. Flagship projects such as Car-
bon2Chem and the Kopernikus projects demonstrate
how cutting-edge science and innovative companies
can successfully cooperate. We use these experiences
to develop internationally visible and exportable
‘showcase’ initiatives for hydrogen technologies.
Among other things, our research focuses on hydro-
gen applications such as direct reduction as a means
of reducing carbon emissions in the steel and chemi-
cal industries.

Now is the time to put laboratory innovations into
practice – faster than we used to in the past – and to
enable their industrial roll-out. To speed up the trans-
fer of innovation for key enabling technologies, par-
ticularly in the field of hydrogen, and to help these
technologies become marketable more quickly, the
regulatory sandboxes for the energy transition have
been established as a new funding pillar of energy
research. The National Decarbonisation Programme
also helps to speed up the way innovative climate
technologies that rely on hydrogen are made available
and used throughout industry.

Hydrogen is also an education issue: the hydrogen
industry needs skilled workers, both in Germany and
abroad. This is why we will explore new horizons for
the cooperation between education and research.
14

IV.	Governance for the National Hydrogen
     Strategy
A flexible and results-oriented governance structure                            bonisation of industry, transport and buildings/heat,
will be created to monitor the implementation of the                            infrastructure, international partnerships, as well as
strategy and develop it further (cf. Figure 1).                                 climate and sustainability. In its first meeting, the
                                                                                Council elects one of its members as Chair.
A State Secretaries’ Committee on Hydrogen, com-
posed of the relevant ministries, will provide contin-                          The task of the National Hydrogen Council is to advise
uous support for the activities under the National                              and support the State Secretaries’ Committee through
Hydrogen Strategy. In the event of delays in imple-                             proposals and recommendations for action in imple-
mentation or a failure to meet the targets of the Strat-                        menting and enhancing the Hydrogen Strategy. The
egy, the State Secretaries’ Committee will immedi-                              Council and the State Secretaries’ Committee hold
ately take corrective action in coordination with the                           regular joint meetings in order to facilitate coordina-
Federal Cabinet, adapting the action plan to the new                            tion between the Federal Government and the Council
requirements. The aim is to ensure that the National                            and to ensure the Council’s work ties in closely with
Hydrogen Strategy remains in line with market devel-                            the activities of the various ministries during the imple-
opments and delivers on its overall targets.                                    mentation of the National Hydrogen Strategy. Also,
                                                                                designated representatives of the ministries concerned
The Federal Government will appoint a National                                  (e.g. from the competent Directorates-General) attend
Hydrogen Council. The Council is made up of 26                                  the Council’s meetings as guests. At the request of the
high-level experts from business, science, and civil                            Länder, two Länder representatives may attend the
society who are not part of the public sector. The                              meetings as guests. The National Hydrogen Council
members of the Council should have expertise in the                             meets at least twice a year.
fields of production, research and innovation, decar-

Figure 1: Governance structure of the National Hydrogen Strategy

                                                                                           Strategic management: decides on targets,
          State Secretaries Committee on Hydrogen                                         objectives, action plan, etc.
                                                                     Monitoring report
                                         Advises and
                                         supports

                   National Hydrogen Council                                            Cordination
                                                                                          Office                  Supports ministries and
                                    Chair*                        Coordinates
                                                                                         Secretariat              Council
               Production, research, and innovation,                Supports                                      Project structure for
              decarbonisation of industry, transport,                            Project management               implementing the Strategy
                and buildings/heat, infrastructure,
                 international prtnerships, climate
                         and sustainability
                                                                                                       Advises and makes recommendation
                                                                                                       for action, provides specialist support
             Ministry1 und Länder representatives as guest

         Develops                     Action Plan             Monitoring and supports

                                                                                            Measures are implemented by responsible
     Measure 1              Measure 2             Measure 3    Measure 4                    government representatives in cooperation
                                                                                            with relevant (also international) partners
  * Elected by the members of the National Hydrogen Council
  1
    e.g at Director-General level
IV. GOVERNANCE FOR THE NATIONAL HYDROGEN STRATEGY            15

The ‘Green Hydrogen’ Innovation Officer of the Fed-          the basis for an extended report, to be prepared every
eral Ministry of Education and Research (BMBF) is a          three years, which provides an overall evaluation of
permanent guest of the State Secretaries’ Committee          the strategy and action plan and suggests how these
and the National Hydrogen Council. The Officer is in         can be developed further. The aim on this basis is to
charge of the organisation of research and develop-          ensure the National Hydrogen Strategy is kept in line
ment activities conducted by the BMBF, and coordi-           with market trends and delivers on its targets.
nates their implementation in cooperation with the
government, business, and science representatives
that are involved in the process. Furthermore, the           Cooperation between the Federal
Officer ensures that promising innovative approaches         Government and the Länder
and stimuli arising from the research that is con-
ducted under the responsibility of the BMBF enter            Aside from the measures taken at federal level, the
the political realm and are taken up by public debate.       Länder have also been planning and implementing
                                                             their own hydrogen-related measures that are just as
The Federal Government is establishing a Hydrogen            important in terms of the creation of a hydrogen
Coordination Office alongside the National Hydrogen          economy and the leadership of German companies.
Council. On behalf of the Federal Government, the            Close cooperation between the federal and state levels
secretariat of the Coordination Office assists the min-      helps to coordinate activities, use synergies, avoid path
istries in implementing the Hydrogen Strategy, and           dependencies, share valuable experience, and define
the Hydrogen Council in coordinating and drafting            further steps of action. For this purpose, the Federal
recommendations for action. The Coordination Office          Government will soon (during the first half of 2020)
is also responsible for monitoring the National Hydro-       establish a suitable platform format (e.g. in the form of
gen Strategy. Furthermore, it actively supports the          a Federation-Länder Working Group on Hydrogen)
ministries in the implementation of the Strategy by          and make sure the Länder governments are kept
providing a flexible project management structure. To        informed about the activities of the Hydrogen Coun-
this end, thematic task forces are established at the        cil. Existing networks, initiatives, and working groups
Coordination Office.                                         focusing on hydrogen will be taken into account and,
                                                             where appropriate, serve as a basis for further activi-
An annual monitoring report provides a basis for rec-        ties.
ommendations and decisions to be made by the
Hydrogen Council and the State Secretaries’ Commit-
tee. The report not only gives an account of the over-
all progress made on the creation of a hydrogen econ-
omy, but also outlines any unexpected challenges that
may have arisen during the reference period and
identifies the steps that have to be taken. It also places
particular focus on the European and international
dimensions. The relevant indicators on which the
report is based are continuously collected and evalu-
ated as pertaining to the various fields of action (e.g.
the electrolysing capacity installed in Germany,
Europe, and other relevant countries; the amount of
hydrogen and production methods across different
fields of application). These monitoring reports form
16

V.	Action Plan: steps necessary for the
    National Hydrogen Strategy to succeed
In tabling this Action Plan for the National Hydrogen        for German industry. This shows that continuous
Strategy, the Federal Government is laying the basis         development is a built-in feature of the National
for private investment in hydrogen generation, trans-        Hydrogen Strategy.
port and use that is both economically viable and sus-
tainable. This can also play a part in mitigating the
impact of the COVID-19 crisis and reviving the Ger-          Hydrogen production
man and European economies. In a first ramp-up
phase until 2023, the Federal Government will take a         Reliable, affordable, and sustainable ways of produc-
number of measures in the fields listed below. It will       ing hydrogen are essential for its future use. Now is
be for the competent ministries to ensure that the           the time to construct demonstration plants at an
measures are implemented and financed on the basis           industrial scale and scale these up further to ensure
of the existing budget estimates and financial plans.        that the cost of hydrogen production degresses con-
However, there is also a cross-cutting dimension to          siderably.
the National Hydrogen Strategy and there will be a
strong focus on a systemic approach. This means that
supply and demand will always be considered                  Measure 1
together.                                                     A better framework for the efficient use of electric-
                                                              ity from renewables (e.g. by means of sector cou-
The measures set out in the Action Plan are those for         pling) and a fair design of the energy price compo-
phase one of the National Hydrogen Strategy, i.e. the         nents induced by the state, in line with the climate
phase up to 2023, by which time the ramp-up is to             targets and the targets for the energy transition
begin and the basis for a well-functioning domestic           (fostering grid stability), so as to create greater
market to be laid. Parallel to this, essential issues such    scope for the production of green hydrogen. The
as research and development and international                 introduction of CO2 pricing for fossil fuels used in
aspects are to be tackled as well. The next phase, which      transport and the heating sector is an important
is due to begin in 2024, is about stabilising the newly       element here, and will be complemented by a
emerging domestic market, moulding the European               reduction of the EEG surcharge as envisaged in the
and international dimension of hydrogen, and using it

                                                                                                2030
                                                                                 Phase 2

                                             2023                      Strengthen market ramp-up
                                                                       Nationally & Internationally

                                Phase 1
                         Start market ramp-up,
                         Harness opportunities

     2020
V. ACTION PLAN: STEPS NECESSARY FOR THE NATIONAL HYDROGEN STRATEGY TO SUCCEED              17

2030 Climate Action Programme. This, however,             for the production of green hydrogen, e.g. to help
will not be sufficient in the long and mid-terms to       decarbonise the steel and chemical industries. If
ensure a viable business environment for compa-           necessary, the financing that has been earmarked
nies operating plants for the production of green         for the National Decarbonisation Programme will
hydrogen in Germany. Beyond what has been                 be topped up as needed.
agreed in the Climate Package, we will therefore
explore the possibility of additional reform of the
price components induced by the state whilst con-
tinuing to establish CO2 pricing as a key guiding        Measure 4
instrument. Our analysis will also include the ques-      Due to the high number of full-load hours, off-
tion as to whether it might be possible to largely        shore wind energy is an attractive renewables tech-
exempt electricity used for the production of green       nology that can be harnessed for the production of
hydrogen from taxes, levies, and surcharges. In par-      green hydrogen. The framework for this is being
ticular, we are working towards exempting the pro-        developed further to ensure that investments in
duction of green hydrogen from the EEG surcharge.         this area pay off. Potential adjustments that will be
As we do so, we will ensure that the EEG surcharge        discussed include the designation of additional
dues not rise.                                            areas that can be used for offshore production of
                                                          hydrogen/PtX, the infrastructure necessary for this,
                                                          and the potential for additional auction rounds for
                                                          the production of renewables (implementation
Measure 2                                                 starts in 2020).
Also being explored are possibilities for new busi-
ness and cooperation models for operators of elec-
trolysers and for grid and gas network operators in
line with the principle of regulatory unbundling         Fields of application
(results expected in 2020). We want to launch one
or two model projects to test highly promising           Reliable demand and greater use of hydrogen are
approaches that could significantly ease the burden      both needed for the hydrogen market to continue to
on the grids at an affordable price without distort-     develop. There are economic reasons why the hydro-
ing the hydrogen market. Work to explore any             gen ramp-up must proceed in a targeted way and
potential need for amending the regulatory frame-        incrementally. For this reason, its use as an alterna-
work to make this possible is being undertaken.          tive fuel in some areas of the transport sector and as
                                                         a base substance for recycling and a reductive in
                                                         high-priority industrial applications is to be increased.
                                                         High-priority in this case will be fields in which the
Measure 3                                                use of hydrogen is close to being economically viable
As part of our Climate Action Innovation Pact, we        in the short or medium term, in which no major path
are also supporting the switchover to hydrogen in        dependency is being created, or in which there are no
the industrial sector by providing funding for           alternative options for decarbonisation.
investments in electrolysers (implementation starts
in 2020, for more details on the Climate Action
Innovation Pact and the support for hydrogen
applications in the industrial sector cf. Measure 14).
We are also exploring potential tendering schemes
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