German government fails to agree on green hydrogen strategy

BERLIN/FRANKFURT (Reuters) - Germany’s government on Friday failed to agree on a national hydrogen (H2) strategy, with ministers divided over proposed capacity and implementation times for the long-awaited plan to help decarbonise the economy and cut carbon dioxide emissions.

Electrolysis is a carbon-free process, if powered by renewable electricity, to extract “green” hydrogen from water.

Germany wants to use wind and solar energy to produce more of this alternative fuel to replace gas and oil in the heating and transport sectors, especially for heavy goods transport.

An email from the economy ministry seen by Reuters showed the strategy was not ready for adoption by the cabinet on June 3, a date environment minister Svenja Schulze had earlier said could be achieved.

However, a last-minute intervention to salvage the June 3 completion remains possible, sources close to the negotiations said.

Would-be investors in new energy systems are frustrated by the long wait for clarity on how much electrolysis capacity the country wants to build and over what time period.

Economy minister Peter Altmaier of Chancellor Angela Merkel’s Conservatives wants between 3,000 and 5,000 megawatts (MW) of capacity to be built by 2030 while the Social Democrats, junior partners in the coalition, want 10,000 MW.

The European Union includes the promising technology in its Green Deal drive.

Germany also hopes to replace what is known as “grey” hydrogen, produced from natural gas, with the green variety in manufacturing processes in the steel, cement and chemical industries.

Altmaier has said it will not be possible to produce enough hydrogen from renewables domestically and an import industry must be built up for hydrogen from wind and solar power intensive countries to achieve CO2 targets.