Consumers and lobbies not happy with government’s hydrogen support

A proposal to exclude hydrogen producers from paying the renewables charge on the power they consume has been slammed for failing to focus solely on green hydrogen and imposing an additional burden on ordinary consumers.

Following the adoption of a revision of the Renewable Energy Source Act (EEG) by the German federal parliament at the end of 2020, the German energy and economic ministry (BMWi) has now launched a consultation on the new set of rules governing assistance for renewable energy installations and hydrogen production.

The draft law includes a larger area for agri-photovoltaic plants, as well as specifications for so-called innovation tenders for storage capacity and follow-up assistance for small-scale liquid manure facilities. It also governs the renewable energy surcharge (EEG fee) exemption for electricity used to manufacture green hydrogen. The EEG tax is paid by all electricity customers as part of their monthly bills, and the funds are used to fund renewable energy feed-in support. The surcharge is (partially) waived for large energy-intensive consumers. The Renewable Energy Association BEE criticized the fact that there are two alternative ways for hydrogen producers to avoid paying the extra (partially). While one paragraph of the law applies sustainability requirements to the production of green hydrogen with renewable power, another section of the bill allows for a reduction in the levy if an energy-intensive enterprise concentrates primarily on electrolysis regardless of the “color,” or the source of power used in the process.

According to consumer group VZBV, lowering the renewables levy for hydrogen producers should not harm individual consumers. They proposed that instead of subsidies, taxes should be used to fund the hydrogen sector.

The German Biogas Association criticized the follow-up subsidy for smaller liquid manure plants when the previous feed-in assistance under the Renewable Energy Act (EEG) expired in 2024. (Fachverband Biogas). It claimed that the projected pay of 13 cents per kilowatt-hour for plant owners was “far distant from any economic feasibility.” Instead of allowing biogas plants to utilize more liquid manure, the proposed law would prevent many facilities from continuing to operate since it forbids current facilities from being downsized and increased liquid manure consumption.