Germany wants to be climate-neutral by 2045. The energy conversion offers the chance to get away from Russian gas imports as well. Hydrogen plays a major role in this. The expectations are high, and so are the hurdles.
When Green politician Robert Habeck took up his new post at the beginning of December, he didn’t just become the Federal Minister of Economics, but the Federal Minister of Economics and Climate Protection. There’s more behind this than just a new portfolio. The new government wants to set the course for making Germany climate-neutral by 2045. This will require a massive restructuring of the economy as well as a change in energy and transport policy.
German industry is to reduce its emissions by a third by 2030. What this means is clearly demonstrated in the German state of North Rhine-Westphalia, where Minister Habeck has now made his inaugural visit. In the densely populated Ruhr region, coal was mined until 2018. Accordingly, many energy-intensive industries that traditionally burn the fossil fuel can be found there. Whether chemicals, aluminum, foundries, paper, glass or steel.
Largest rebuild in the history of the plant
In Germany, the steel industry is responsible for almost a third of all industrial emissions. But the use of coal and coke in production cannot be replaced by electricity. But hydrogen can. The gas can be produced in various ways. By electrolysis, for example. When water is split into its components oxygen and hydrogen using electricity from renewable sources, this is known as “green” hydrogen, i.e. hydrogen produced in a climate-neutral way.
This is what the Duisburg-based steelmaker thyssenkrupp wants to use as soon as possible. “We are ready to start the transformation, our plans are ready for implementation,” said Bernhard Osburg, CEO of thyssenkrupp Steel during the visit of Economics Minister Habeck. He added that the switch to climate-neutral steel production was “the biggest transformation of our plant and perhaps the most important step in our history.”
The conversion will be expensive
The plant site is almost ten square kilometers in size. On a wasteland on the Rhine, where the steel group currently stores its tons of crude steel, the new production facility is to be built, which will be completely different from the previous blast furnaces in terms of technology. The first plant is scheduled to go on stream in 2025, the second in 2029.
The foreseeable costs are enormous. thyssenkrupp puts them at 2.2 billion euros by 2030, with a further seven billion euros to be added by 2045. The Group needs investment aid for this, which has long been applied for but still has to be approved by the EU Commission. Economics Minister Habeck is confident: “I am convinced that the steel sector can become the poster child of the climate-neutral economy.”
The hurdles are formidable
But this will require large quantities of hydrogen produced in a climate-neutral way, and that is currently still in short supply. “Worldwide, only one percent of the hydrogen produced is currently green,” calculates Klaus Schäfer, chairman of the Society for Chemical Engineering and Biotechnology (Dechema). “Sustainable hydrogen will remain a scarce resource in the coming years, facing a growing demand.”
Explained vividly: to completely convert its steel production, thyssenkrupp alone needs so much hydrogen annually that it would require the energy of 3,800 wind turbines. There are currently just under 29,000 wind turbines in Germany. But Thyssenkrupp is just one of thousands of companies hoping for green hydrogen.
Insufficient generation capacity
A national hydrogen strategy was launched under the last German government. Since summer 2021, Dechema and the German Academy of Science and Engineering (acatech) have now been working on a Hydrogen Compass, a study aimed at further developing and concretizing the government’s strategy.
However, the interim results of the study, which have now been presented, are sobering. There are currently around 40 electrolysis projects in Germany. Based on this, the researchers calculate an electrolysis capacity for climate-neutral hydrogen of around five gigawatts for 2030. That is only half of the target set in the coalition agreement of the new German government.
80 percent imports
The Hydrogen Compass says that even with optimistic assumptions, the domestic capacity built up to 2030 will not be enough to meet the minimum demand of about 50 terawatt hours. “80 percent of the demand for green hydrogen will have to be imported,” concludes Dechema board member Klaus Schäfer.
In order to bring demand and supply into line in the future, it is necessary to set the right political course without delay. According to the scientists, this requires not only the massive expansion of renewable energies in Germany, which is planned by the government anyway, but also the accelerated development of energy partnerships abroad.
Africa has enormous capacities
Work is already underway on this, as shown by the “H2 Potential Atlas” of West Africa, which was presented last year at the German Federal Ministry of Research. According to it, a maximum of 165,000 terawatt hours of green hydrogen could be produced annually in West Africa alone. And at a price of just 2.50 euros per kilogram. In Germany, on the other hand, the costs are estimated to be around 3.80 euros even in 2050.
Hydrogen can be transported via existing gas pipelines, which would require minor modifications. In addition, hydrogen can be converted into ammonia, making it navigable. But here, too, the infrastructure is still a problem. For the tankers, the appropriate terminals would still have to be built in the ports on the North Sea.
