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The decarbonisation of the economy requires, among other things, adequate infrastructure and an appropriate legal framework. In its position paper "Climate Neutrality 2045", the German Chamber of Commerce and Industry (DIHK) plenary assembly outlined in September 2023 the conditions that need to be taken into account or created to successfully achieve the energy transition.
Germany aims to significantly reduce its greenhouse gas emissions by 2030 and achieve climate neutrality by 2045. The challenge is to reach climate neutrality while remaining a leading industrial nation. How can this goal be achieved?
The transition of Germany's energy mix from fossil fuels to renewable energies while drastically reducing final energy consumption is a Herculean task. The German economic location faces significant negative consequences if political course corrections are not swiftly implemented, especially regarding infrastructure for the energy transition and climate protection. New infrastructures and transport routes are particularly required in the hydrogen sector and for the CO2 capture.
Creating access to CO2-free energy
German businesses are increasingly under pressure due to high energy costs and rising CO2 prices. Many companies cannot fully achieve climate neutrality through energy efficiency improvements and electrification. For these enterprises, physical access to CO2-reduced hydrogen at internationally competitive prices or technologies for CO2 capture and storage as well as CO2 infrastructures is crucial.
A temporary bilateral procurement of hydrogen via certificates is sensible but does not replace physical access, as companies require long-term access to CO2-free energy. Regional particularities and conditions must be considered through market analyses. Required are sufficient design flexibility for future users, an appropriate legal framework, and the rapid development of infrastructure.
Ten Proposals
Companies must strive for climate neutrality through sustainable solutions.
To support entrepreneurial decisions towards corporate climate neutrality, it is important that the availability and costs of various alternatives can be compared. For this purpose, the Federal Network Agency and network operators must collect data to outline potential local and regional needs. This would allow the identification of potential company clusters. Surveys conducted by the IHK Organisation can help in this regard. Moreover, close coordination is advisable between pipeline operators/supra-regional entities and distribution network operators/regional or municipal actors. The future hydrogen core network should be designed to directly enable optimal supply to potential end users.
Germany will need to import large quantities of hydrogen and export CO2. Therefore, it must be possible to utilise various import and export paths, including pipelines, lorries, railways, and (inland) ships. Furthermore, right from the start, the project planning should also include storages, as well as import and export terminals in addition to regional networks.
The swift (new) construction of infrastructure should, analogous to expanding renewable energies and the necessary grids, be classified as "an overarching public interest" as well as contributing to public security. This ensures that the new infrastructures are efficiently established.
Through harmonised laws, it is possible to create a uniform EU market and increase supply security. A European strategy alongside the expansion of the hydrogen infrastructure is pivotal to ensuring the economy's long-term needs. Overall, companies' technical connectivity to a network must be secured.
Existing natural gas storage facilities can partly be converted to store hydrogen. Due to the high hydrogen demand and the necessity to enhance the resilience of renewable energy grids, it also makes sense to build additional storage capacity. If these cannot be financed by the market, public investment is needed. In addition to hydrogen storage facilities, CO2 storage capacity is also required. The utilisation of CO2 (CCU) is essential for certain industries, such as the chemical industry. Therefore, it should also be examined whether the reuse of CO2 can be considered in the framework of the European Emissions Trading System and offset against the obligation to pay levies.
Planned to greatly restrict the substance group of Per- and Polyfluorinated Alkyl Substances (PFAS) under the EU chemicals regulation REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals). Holistically designed and permanent exception regulations, considering the entire value chain, are necessary for constructing the hydrogen infrastructure. Without this, the expansion of renewable energy would be endangered and operational climate goals unattainable.
The Federal Government should support the involved parties, including the German Chamber of Commerce and Industry (IHK), in demonstrating the importance of these technologies to the public transparently using data and facts.
The necessary investments should be recognised as of paramount public interest and temporarily co-financed through European or national funding. It is essential to simplify and accelerate the IPCEIs (Important Projects of European Common Interest) instrument to make it accessible for SMEs (small and medium-sized enterprises). This creates incentives for comprehensive and rapid expansion across the EU. The state can ensure the amortisation of pipelines in cases where hydrogen usage or CO2 transport is delayed, thereby safeguarding profitability.
Without implementing this, "first movers" would face disproportionate burdens and the establishment of the hydrogen market would be significantly slowed. To reduce potential disparities between federal states during network development, network charges should also be harmonised nationally.
