Wacker Chemie AG has reapplied for European Union funding for its initiative at its Burghausen plant to produce green hydrogen and renewable methanol.
In 2020, the WACKER Group appealed to the European Commission’s EU Innovation Fund for funding for its RHYME (Renewable Hydrogen and Methanol) Bavaria project. During the initial review process, RHMYE Bavaria won over more than two hundred competing projects. Despite the jury’s high ranking, it was unable to qualify for the final stage.
“The EU has now adjusted its selection criteria as well as increasing annual funding from €1 billion to €1.5 billion, which makes it possible to fund a medium-sized, albeit highly innovative project such as RHYME Bavaria,” explained Christian Hartel, president and CEO of Wacker Chemie AG. “That’s why we think resubmission of this trailblazing project stands a good chance of receiving the necessary EU funding. RHYME Bavaria is a key building block in meeting our ambitious climate-protection and sustainability targets. We want to halve our absolute greenhouse gas emissions by 2030 and achieve net-zero production by 2045.”
RHYME Bavaria is a 20-megawatt electrolysis plant that will use renewable energy to manufacture hydrogen from water. WACKER wants to convert this green hydrogen into renewable methanol by utilizing carbon dioxide (CO2) from existing manufacturing processes. Methanol is a critical starting material for the synthesis of chemical products such as silicones.
This factory is expected to have a capacity of 15,000 metric tons of methanol per year. In comparison to current manufacturing procedures, the novel approach to methanol synthesis could fully eliminate CO2 emissions. Carbon dioxide equivalents to those required by RHYME Bavaria would be removed from the atmosphere. Rather than that, they would be recycled as a raw material in the manufacture of chemicals.
WACKER anticipates investing approximately €100 million in the project, with EU assistance in the tens of millions of euros being sought. Until 2030, the EU’s Innovation Fund will invest €10 billion in innovative low-carbon technologies and processes in energy-intensive industries.
“Our RHYME Bavaria goal is to narrow our carbon footprint even further,” explained CEO Christian Hartel. “By producing green hydrogen and using it as a material, we are making an essential contribution toward markedly reducing fossil resources in chemical processes and products.”
Nonetheless, Hartel argued, such a project would be uneconomical in the current environment. “That is why we want governmental assistance to enable the transition to a renewable hydrogen economy.” He said that investment grants alone were insufficient. Operating costs have to be subsidized as well, in order for a facility like RHYME Bavaria to be profitable in its first few years. In the medium run, he said, an electricity price of roughly 4 cents per kilowatt-hour was required to make this type of energy-intensive enterprise profitable.
“As an energy-intensive company, we have been in favor of an industrial electricity price for many years now in order to maintain our international competitiveness even as we accelerate our move toward net-zero status,” he emphasized. “Our processes are among the most efficient in the world – making them some of the most economical too,” he added. “Yet, in Germany, we have to pay an electricity price that is much higher than what our competitors in other parts of the world pay. That hits our entire industry hard.”
Hartel continued by stating that the recent exorbitant increases in German electricity costs demonstrated how critical it was for export-driven industries such as the chemical industry to maintain an internationally competitive industrial electricity pricing. Additionally, the WACKER CEO called for a significant and quick increase of renewable energy sources. Only in this manner, he continued, could substantial quantities of green hydrogen at competitive prices be made available for projects such as RHYME Bavaria.
“A project like RHYME Bavaria might serve as a springboard for defossilizing chemical processes and products in Bavaria’s so-called chemical triangle,” he added. The chemical triangle is a region in southeast Bavaria that is home to various chemical firms, notably the Burghausen location of WACKER. The region’s integrated hydrogen network could evolve into a Bavarian center for green hydrogen over time. In light of this, Hartel believed it would be a significant political statement if RHYME Bavaria – contrary to the original evaluation phase’s outcome – became the first German project to receive funding from the EU Innovation Fund.
