October 27, 2020

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Germany names hydrogen the hero of its post-coal future

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“It will be impossible to cover the capacities required in Europe within Europe itself.”

Hydrogen can be produced with no greenhouse gas emissions if the process is powered by renewable energy, or by fossil fuels when the resulting carbon is captured and stored. According to Australia’s Clean Energy Finance Corporation, hydrogen can enable the “deep decarbonisation of notoriously difficult-to-abate sectors” – particularly manufacturing.

Germany’s plan to phase out fossil fuels requires so much hydrogen to fill the gap that any partnership with Canberra could feasibly eclipse the volumes Australia expects to send to Japan by the end of the decade.

Nearly €10 billion ($16.4 billion) of Germany’s coronavirus stimulus package has been earmarked for the development of a domestic hydrogen industry and building international supply chains with countries like Australia.

Both countries have signed an agreement for a joint feasibility study to examine how big the partnership could be.

Karliczek said Germany had identified a hydrogen demand of about 1000 TWh per year by 2030, which is equivalent to about 3 million tonnes.

Germany's Minister for Research Anja Karliczek is leading the development of the country's hydrogen industry.

Germany’s Minister for Research Anja Karliczek is leading the development of the country’s hydrogen industry.Credit:Getty

“Of this amount, 15 per cent is expected to be generated domestically, while the remaining amount will need to be imported,” she said.

Some will come from other European countries – particularly those bordering the North and Baltic seas – but the rest will have to be sourced from elsewhere.

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“Let’s assume [the feasibility study produces] evidence for a stable and cost-efficient supply chain for green hydrogen between Australia and Germany. This would give Australian exports the opportunity to cover a significant percentage of our demand,” Karliczek said.

“The costs will ultimately be a decisive factor – especially the costs of the renewable electricity needed. I am therefore convinced that countries which, like Australia, have excellent conditions for the cost-effective production of green hydrogen will continue to play an important role as partners for Germany in the long term.”

Analysis by the International Energy Agency last year found Australian hydrogen imports into Japan could be cheaper than domestic production by 2030, even when substantial transport costs are included.

Hydrogen has been listed as a priority in the Morrison government’s “technology investment road map”.

The plan not only includes “green” hydrogen produced from renewables but also “blue” hydrogen produced from gas and using carbon capture to bury the emissions.

The German government’s national hydrogen strategy states that only green hydrogen is considered sustainable in the long term.

Overall, coal represented nearly 30 per cent of Germany’s energy generation last year. Karliczek said Germany’s chemical and steel industries would be among the “first customers” as soon as Australian hydrogen production chains were established.

She also predicted a deal with Australia would spur the development of a fleet of cargo tankers that have their traditional polluting engines replaced with a hydrogen fuel cell and an electric motor.

“Another technological option would be to replace diesel from fossil sources with climate-neutral, synthetic fuels,” she said.

“The bottom line is that this is a challenge we must meet. However, I am confident that research and innovation will allow us to find solutions to this challenge.”

Trade and Investment Minister Simon Birmingham said Australia could be a global supplier of green hydrogen if the price of production was competitive.

“With Germany expected to be one of the largest users of hydrogen in the world, we’re positioning ourselves through early co-operation to get ahead of the pack,” he said.

“Our Technology Investment Roadmap identifies hydrogen as a priority and this deal we’ve signed with Germany will help get the ball rolling on joint initiatives that could ultimately lead to billions of export earnings for Australia and support thousands of jobs.”

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