Germany aims to achieve climate neutrality by 2045, with hydrogen playing a pivotal role. The federal government plans to import a significant portion of this hydrogen.
Thyssenkrupp Steel in Duisburg, home to four large blast furnaces producing ten million tons of steel annually, is a significant CO2 emitter. The company plans to transition from coal to hydrogen, aiming to save 3.5 million tons of CO2 each year. While this decarbonization project is one of the largest globally, it is essential to scrutinize its feasibility and the broader implications for the steel industry.
According to Tom Smolinka from the Fraunhofer Institute, hydrogen can be a versatile energy source, applicable in the steel and chemical industries, transport sector, and power plants. The German government supports this view and is working to establish hydrogen as a key energy source. However, the technology remains expensive, with only small pilot projects currently operational. Building the necessary infrastructure, including production facilities and 10,000 kilometers of pipelines, requires billions in investments.
The German federal government anticipates a substantial increase in hydrogen demand, potentially necessitating the import of 50 to 70 percent of its hydrogen. Plans include building pipelines to Denmark, Norway, Great Britain, Ireland, France, Spain, Portugal, and Algeria. However, these plans are mostly theoretical at this stage, and it remains unclear how soon they can be realized or at what cost.
Critics, including the CDU and CSU, argue for better utilization of European potential and caution against a European price war. Andreas Jung, energy policy spokesman for the CDU/CSU, advocates for joint European procurement to avoid driving up prices. Yvonne Ruf, a hydrogen expert at Roland Berger, expresses doubts about meeting ambitious targets and highlights lagging infrastructure development.
Despite broader concerns, Thyssenkrupp remains optimistic. The company plans to have its first hydrogen plant for steel production operational by 2027. Matthias Weinberg, head of the Metallurgy Center at Thyssenkrupp, trusts the federal government’s commitment to developing a hydrogen supply. However, this optimism must be balanced with a critical assessment of the practical challenges involved.
