Germany seeks hydrogen-exporting friends in global south

Berlin makes development offer to countries that could sell clean energy

Germany hopes to use hydrogen to clean up carbon-heavy sectors such as the steel industry. AFP
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Germany is offering a deal to the global south – we help you produce clean energy, then you send us hydrogen.

A strategy unveiled on Wednesday says Germany will need to import 50 per cent to 70 per cent of its future hydrogen needs.

It means Germany is looking for sellers and it wants to avoid relying on one country as it did with Russian gas before the war in Ukraine.

A test shipment of ammonia, a derivative of hydrogen, has already been sent to Germany from the UAE and there are plans to buy from Saudi Arabia from 2026.

Imports from Africa are also in Germany’s sights in what is billed as a “development opportunity” for countries planning to produce green energy.

The hope is that Germany’s economic and diplomatic heft can get “significant private resources” flowing into developing countries to help them become exporters.

“We do not just want to reliably import hydrogen, but help ensure that the new hydrogen supply chains lead to good, sustainable development,” said Germany’s Development Minister Svenja Schulze.

“Where wind and solar power are produced to make hydrogen, the energy transition on the ground is given a boost at the same time and the local population is provided with electricity. And where seawater is desalinated to make hydrogen, the next town will be supplied with drinking water.”

Hydrogen is seen as a fuel of the future because it does not directly contribute to global warming. Ministers in Berlin see it as an answer for sectors such as heavy industry that are difficult to run on electricity. Germany has a target of being carbon neutral by 2045.

However, hydrogen has to be split off from water before it can be burnt as fuel. Only if this is done using renewable energy is it known as “green hydrogen”.

Berlin has explored turning to Canada’s windy Atlantic seaboard or Africa’s sunny conditions to get green hydrogen in future, but it happens in only small quantities at present and is relatively expensive.

Germany announced that it would double a target of domestic production from five gigawatts to 10 by 2030, even as it looks to imports to cover most of its future needs.

Hydrogen pipelines

While some hydrogen will arrive by ship, Germany is keen to use pipelines where possible that could foster an interconnected hydrogen economy in Europe.

Chancellor Olaf Scholz has touted the idea of turning gas infrastructure that was hurriedly built after Russia’s invasion of Ukraine into part of a future hydrogen grid.

A separate import strategy is due to be published later this year, with ministers looking to the private sector to negotiate deals with suppliers.

“We have clearly raised our ambition level for hydrogen,” said Economy Minister Robert Habeck after the new strategy was signed off at a cabinet meeting on Wednesday.

Environmental groups criticised the fact that subsidies will go to hydrogen made from non-renewable sources – variously known as blue, grey, orange or turquoise – while Germany waits for green to become the norm.

“Including fossil-blue hydrogen in the national hydrogen strategy is a massive step back in climate policy,” said Sascha Mueller-Kraenner, the head of pressure group Environmental Action Germany.

“This is a huge missed opportunity to clearly prioritise green technology … instead, the government is banking on blue hydrogen indefinitely and is thereby enabling the gas sector to keep mining for fossil gas.”

Updated: July 26, 2023, 1:42 PM