Germany Risks Missing Hydrogen Targets on Muddled EU Strategy

(Bloomberg) -- Germany is far from reaching its hydrogen production target for 2030, with investors put off by lawmakers’ unclear strategies for the clean fuel.

Green-hydrogen projects currently being planned will only deliver 5.6 gigawatts of capacity by the end of the decade, short of the country’s target of at least 10 gigawatts, according to an analysis by the Institute of Energy Economics at the University of Cologne on behalf of utility EON SE. At present, hydrogen production capacity using renewable energy is only 0.95 gigawatts.

Berlin is planning subsidies to spur the switch to green hydrogen, seen as crucial to reduce dependency on fossil fuels, to decarbonize industry and transport, and to reach the country’s climate goals. But no coherent definition of the fuel exists in the European Union, a factor that limits investment decisions as operators don’t know whether their plants fulfill the criteria, according to the study.

While large parts of Germany’s current infrastructure are already hydrogen-ready -- up to 20% can easily be mixed in with natural gas, according to the experts -- investment to make them 100% fit could be discouraged by the EU’s draft proposals on incorporating hydrogen into the bloc’s gas market rules, EON warned. The European Commission plans to separate hydrogen networks from gas network operators, and unbundle the business of energy production and supply.

“It must be possible to keep gas and hydrogen networks within one company,” EON board member Patrick Lammers said. Otherwise gas network operators would lose incentives to re-purpose their infrastructure for hydrogen. The EU proposal is still under discussion.

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