Page 9 - Euroil Week 10 2020

EurOil POLICY EurOil
Germany opts against blue hydrogen support, in blow to gas industry
GERMANY
The gas industry is struggling to find a place in the low-carbon future.
GERMANY plans to include only the greenest sources of hydrogen in a package of incentives aimed at developing the fuel as a low-car- bon energy source, Bloomberg reported on March 5, citing a draft government strategy document.
The strategy, if backed by Chancellor Angela Merkel’s cabinet, would come as a setback to German gas producers, who have lobbied the government to support the development of so-called blue hydrogen produced from gas. Carbon capture and storage (CCS) can be used to mitigate the environmental impact of the pro- cess, they say.
“From the federal government’s point of view, only hydrogen that is produced on the basis of renewable energies is sustainable in the long term,” the draft document seen by Bloomberg states. “It is therefore the goal of the federal gov- ernment to use green hydrogen and to support a rapid market ramp-up and to establish corre- sponding value chains.”
Germany is the biggest gas importer in Europe, and local gas companies say the coun- try should exploit this to produce hydrogen on a large scale. This hydrogen can be fed into existing gas pipelines, reducing the infrastructure cost of the fuel. But opponents say that the focus should be on phasing out fossil fuel use completely.
Germany’s decision to omit blue hydrogen from its incentives programme comes as the gas industry struggles to find its place in the future low-carbon economy. Demand for the fuel in Europe is slated to fall 4% by 2030 and by a fur- ther 6% by 2040, according to the International
Energy Agency (IEA).
Still, advocates are still making the case for
the continued use of gas. Earlier this month Ger- many’s Wintershall Dea published a joint posi- tion paper with other companies including the German Chemical Industry Association (VCI), drawing attention to benefits gas has brought to the German economy.
“To achieve the ambitious climate targets without putting Germany as an industrial loca- tion at risk, we need natural gas,” Wintershall CEO Mario Mehren commented at the paper’s publishing. “We can maintain industrial pro- duction in Germany with clean and affordable energy that is reliably available. Gas and the energy transition both belong together.”
The paper concluded that the “above-average value creation” in German industrial produc- tion, which accounts for 27.5% of national GDP, is due in large part to its use of gas. Industrial companies accounted for just under 40% of the country’s gas consumption in 2016, the paper stated.
The chemical industry consumes 15% of the gas used in Germany, and this gas serves as a key feedstock for the production of ammonia and methanol.
Wintershall Dea is at the forefront of blue hydrogen research, having teamed up last year with the Karlsruhe Institute of Technology to develop a means of producing the fuel using methane pyrolysis, which involves separating methane in gas into hydrogen and solid carbon that can be stored. ™
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