As Berlin is handing out generous stimulus packages to revive the economy after crippling coronavirus lockdowns, policy makers are funneling funding into research for electrolysers. Green hydrogen, produced through electrolysis from excess renewable energy, is seen as a silver bullet for sectors with particularly stubborn emissions, such as heavy industry and aviation.
Job machine
The government hopes Germany could create hundreds of thousands of jobs by the middle of the century if it can hold onto its current share of the global market for electrolysers that produce hydrogen, which stands at around 20%.
A highly anticipated National Hydrogen Strategy is due to be approved by the government in the coming week. But key questions are still open such as the volumes of green hydrogen Germany is aiming to produce, and whether hydrogen produced with controversial carbon capture and storage (CCS) should be supported for a transitional period.
Researchers and industry are keen for Germany to become a global technology leader in "tomorrow's oil" by beating Asian countries. We must seize the unique opportunity to use our know-how to become the supplier of a global energy transition,” the research ministry stressed.
Industry supportive
Germany’s export-driven industry has also become a cheerleader for hydrogen. Ramping up this technology internationally would be "a success both in terms of climate policy and industrial policy," according to Germany's industry association BDI, which insists that "the current hydrogen hype is justified."
Steelmaker ThyseenKrupp and the chemicals group BASF have detailed plans for cutting emissions, but lack viable business models to implement them - not only because green hydrogen is still too expensive, but also because massive investments are required to enable its use on a large scale.
The industry said in a study it could become largely greenhouse gas neutral by 2050 with additional investments of around 45 billion Euros. But it would need more than 600 Terawatt-hours (TWh) of electricity per year from the mid-2030s – more than Germany's entire current power production – mainly to produce hydrogen and other renewable fuels.
To become carbon-neutral by 2050, Germany will eventually have to replace natural gas in its energy mix with clean hydrogen. Technology costs would have to fall substantially, possibly supported by investment subsidies, to make green hydrogen an economically viable option.