Urgent debate Needed for Establishing Hydrogen Market to Safeguard European Technological Leadership

The German energy industry association, BDEW, has asserted the urgent need for Europe to discuss and establish a framework that would stimulate a hydrogen economy within the continent, a crucial component of its shift towards climate neutrality. “Regulatory scaffolding for the market and apt structuring of access to infrastructures are imperative,” noted the association in a discussion paper. BDEW chief, Kerstin Andreae, pointed out during a press conference that a tangible business case for the varied aspects of a hydrogen market has been lacking so far.

Despite Germany and the EU launching multiple supportive initiatives, she maintained that a regulatory structure still needs to be formulated. “A European market design conversation akin to those for electricity and natural gas is something we should engage in,” she suggested. The discussion paper mentions that governmental backing will be required for a while, and Andreae highlighted the necessity of blue hydrogen – produced from fossil gas where the CO2 is captured, stored, or utilised – during the transitional period. BDEW, among other propositions, advocates for the enactment of a national hydrogen law and the establishment of uniform standards and certification.

BDEW, alongside other specialists, believe that green hydrogen, generated from renewable electricity, is an essential energy source for a future climate-neutral power system. It can potentially play a vital role in industrial processes that are challenging to decarbonise. The market’s expansion offers an opportunity for industries in Germany and the rest of Europe to seize technological leadership in an area that will be instrumental in global energy transition endeavours. “We are presented with an opportunity to lead in hydrogen technology,” Andreae declared.

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BDEW envisions the development of the hydrogen market in four stages. The initial phase, spanning this year and the next, demands governmental assistance and regulatory flexibility. “2023 is the critical year,” stated Kirsten Westphal, a member of BDEW’s executive board. This stage would be succeeded by a build-up phase extending until the early 2030s, during which a core hydrogen grid is constructed and initial import contracts are established. The period from 2035-2040 will serve as the formative phase, solidifying a market-based hydrogen economy where governmental support concludes. Finally, by approximately 2040, the target phase should establish a market for hydrogen and its derivatives both in Europe and worldwide.