Making green hydrogen in Germany currently costs around €8 per kilo, but the ministry expects this could “easily be lowered to €3 or €4 with exemptions from taxes and levies on electricity.”
Though the government seeks unveil a ground-breaking hydrogen strategy in a week’s time, it is still divided over key points. The research ministry insists on a target for electrolysers with a capacity of 10 gigawatts (GW) by 2030, while the economy and environment ministries believe 5 GW are sufficient.
The strategic focus lies squarely on decarbonising the heavy industry, while provisions about using ‘green’ gas in the heating sector have been removed it the latest draft. Relying on power-to-gas for heating would be an “expensive choice for Germany,” critics warned, because so much energy is lost in the transformation process and more efficient alternatives exist.
By 2030, about 20 percent of hydrogen consumed in Germany should be CO₂-free, according to the draft strategy. The hydrogen transition is hoped to create hundreds of thousands of jobs by the 2050s, if Germany can keep its current 20% share of the global market for electrolysers that produce hydrogen.
Sell the technology, buy the hydrogen
Though the cost of making renewable hydrogen is much higher in Europe than in Asia, “the ship has not sailed yet for Germany,” economic minister Peter Altmaier said, suggesting German-made electrolysis technologies could be exported instead.
In the long-run, Germany will not be able to produce all its hydrogen needs at home but will also need to import climate-friendly fuels from countries where wind and solar power is much cheaper. Such hydrogen imports could come from African countries or Australia.
Competition is intensifying. Chinese electrolyser makers have much lower capital costs than their European counterparts. Aside from China, the minister sees Japan and other Asian countries as the biggest competitors on hydrogen technology.
Despite this, Germany is striving to defend its technological leadership role. According to Altmaier, “our goal has to be to offer the most sophisticated, innovative and environmentally-friendly technology.” He called on the industry to not only focus on research, but also on applications at an industrial scale.