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German gas storage operators slam H2 network plans

  • Market: Hydrogen
  • 01/08/23

Germany's gas system operators should "fundamentally rethink" their core assumptions for a future hydrogen transport network as existing plans would lead to an oversized grid, storage operator association Ines has said.

Germany's hydrogen transport system may need much less entry and exit capacity in the early 2030s than system operators' association FNB has assumed in initial plans, Ines said.

On the entry side, Ines regards the assumed import capacity as particularly oversized. Based on FNB's assumptions, capacity for hydrogen pipeline imports from neighbouring countries would be 58GW by 2032. FNB is factoring in 19GW of "other flows" into the grid, specifically imports from maritime terminals, for a combined 77GW, or 675 TWh/yr.

But in Germany's revised hydrogen strategy, which was finalised last week, the government estimates no more than 91 TWh/yr of imports would be needed by 2030 to meet demand, even in a maximum scenario. Even in longer-term scenarios, maximum import demand does not exceed 422 TWh/yr, Ines said.

It similarly questions assumptions around domestic electrolyser capacities and required exit capacity.

Given the "large discrepancies" between FNB's assumptions and other estimates, including in the national hydrogen strategy and in the government's long-term scenarios, the system operators should "fundamentally rethink" their approach, Ines said. Oversizing the grid risks infrastructure being underused, thereby driving up costs, the association said.

Effective use of storage sites would allow for the network to be kept smaller as these facilities can help meet demand peaks, Ines said.

"It is obvious that storages have not been factored in adequately for peak demand periods" in FNB's plans, it said.

Ines said last year that Germany may need to build new storage facilities for up to 41TW of hydrogen until 2050, in addition to converting existing sites that hold natural gas. While pilot projects for converting existing sites have been launched, uncertainties persist over the feasibility of using facilities for hydrogen, especially in aquifers.

FNB's consultation on its underlying assumptions for the hydrogen transport system ended last week. Based on its assumptions, the association had drawn up a core network comprising 11,200km of pipelines, but said the final network could be shorter when planning has been fully optimised. FNB expects around 60pc of the core network would consist of converted natural gas pipelines, and the remainder would be newly built connections.


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17/03/25

EU prepares CBAM export scheme

EU prepares CBAM export scheme

Brussels, 17 March (Argus) — The European Commission is preparing a "solution" for exported goods under the bloc's carbon border adjustment mechanism (CBAM), to be presented before the end of the year. The commission will also expand the scope of the CBAM to "certain" steel and aluminium-intensive downstream products. The changes to the CBAM will be announced as part of a European steel and metals plan. In a draft of the plan to be formally presented on 19 March, the commission points to the need to address the problem of carbon leakage for CBAM goods exported from the EU to non-EU countries. The draft also notes that the commission is currently "quantifying" risks, before proposing an extension of the CBAM to "certain" steel and aluminium-intensive downstream products, so as to address the risk of European producers relocating outside the bloc to avoid higher carbon costs. The metals plan also announces an anti-circumvention strategy for the CBAM to be presented in the second half of 2025. The commission points to the risk of goods from low-carbon production facilities in non-EU countries being redirected to European customers, while carbon-intensive production continues for other markets. The metals plan also points to the risk of "greenwashing" carbon accounting practices, with "electro-intensive metals production benefiting from market-based instruments to appear low-carbon". The commission put forward proposals last month to simplify the CBAM, exempting some 90pc of the firms currently covered by the mechanism. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Support for 45V solidifies ahead of US budget tussle


17/03/25
News
17/03/25

Support for 45V solidifies ahead of US budget tussle

Houston, 17 March (Argus) — Hydrogen advocates and industry stakeholders have redoubled efforts in Washington DC to make sure 45V production tax credits survive what is expected to be a bruising battle to pay for GOP tax cuts. "After a period of silence in January, we're seeing a sense of unity within the industry and we've gotten a lot more reception from members of Congress and the administration," said Frank Wolak, chief executive officer of Fuel Cell & Hydrogen Energy Association (FCHEA), while attending the CERAWeek S&P Global conference in Houston, Texas, last week. "That is a huge, milestone difference from even a month ago. I'm guardedly optimistic." President Donald Trump's flurry of executive decisions targeting clean energy supports inserted a new round of uncertainty for developers hoping to tap the lucrative tax credit, which came out of former President Joe Biden's signature climate bill, the Inflation Reduction Act (IRA). While the tax credit is still intact, the administration's embrace of fossil fuels has ignited concerns that 45V could be vulnerable as the GOP seek offsets to pay for a multi-trillion-dollar tax cut. As a part of the tax code, 45V requires an act of Congress to overturn it, which protects the incentive from the vagaries of executive decisionmaking but still leaves it exposed to opposing interests in a budget fight. During negotiations related to the national debt, a special parliamentary procedure can be triggered to expedite federal budget legislation by overriding the need for a super majority of votes. "Everything is on the chopping block," said Wolak. Hydrogen proponents point to the broad coalition that has emerged as an encouraging sign, with oil and gas companies throwing their political heft into the effort to protect 45V and Republican lawmakers publicly lauding the job creation by IRA-related tax credits. Powerful friends One major energy company is advocating directly and indirectly through trade associations to keep 45V intact. It believes the credits are crucial to erecting a new industry in the US and will become less necessary as the market matures and drives down costs. ExxonMobil chief executive officer Darren Woods, who expressed support for the tax credit during the company's fourth-quarter earnings call, also said the credits are an interim step for a nascent market. "We believe these incentives are critical to establishing a fully market-based future where hydrogen competes head-to-head with traditional fuels," he said in January. Last week, 21 Republican legislators whose districts have benefited economically from investments driven by the IRA issued a letter of support for incentives amid what it called "efforts to repeal or reform current energy tax credits." "Affordable and abundant energy will be critical as the President works to onshore domestic manufacturing, supply chains, and good paying jobs, particularly in Republican-run states due to their business-friendly environments," said the letter, which was organized by Rep. Andrew Garbarino (R-New York.) Garbarino issued a similar letter last fall urging House leader Mike Johnson (R-Louisiana) to protect IRA tax credits and picked up three more signatures this time. "This is significant," said Paul Dainora, chief commercial officer of electrolyzer maker Ohmium, in reference to the letter. "These tax credits are really important for our customers to build a business case." The Silicon Valley-based company is pursuing up to 250 megawatts of projects in the US this year but none of the larger projects will reach final investment decision before the fate of 45V is certain, said Dainora, who was also attending CERAWeek. The credits are considered so important for US hydrogen prospects that the chief executive officer of another global electrolyzer manufacturer has visited Washington from Europe multiple times in the last month to participate in efforts to buttress support for 45V, said a person involved in the visits who was unauthorized to speak publicly about them. Instead of focusing on hydrogen's cleaner emissions, industry talking points have coalesced around America's interest in maintaining energy dominance, said the person. Pointing to rising demand from the European Union and Asian countries like Japan and South Korea for cleaner burning fuels, 45V supporters are stressing that China is poised to dominate the industry if the US doesn't build its own hydrogen capacity. While businesses await an outcome, advocates take comfort from the fact that the process will wrap up in the next couple of months and allow companies to advance to FID. "We sat idle for two and a half years waiting for determination of what these tax rates would look like," said Wolak of the FCHEA, referring to the long period of uncertainty during which the Biden administration finalized the exact rules for 45V. "This next phase is make-or-break time but it's a short-term window. By Jasmina Kelemen Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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UK, Chinese ministers to meet for formal climate talks


14/03/25
News
14/03/25

UK, Chinese ministers to meet for formal climate talks

London, 14 March (Argus) — UK energy minister Ed Miliband will visit Beijing to meet Chinese ministers for "formal talks to accelerate climate action", the UK government said today. Miliband will meet China's national energy administrator minister Wang Hongzhi and ecology and environment minister Huang Runqiu. "The UK is expected to launch a formal climate dialogue with Chinese counterparts, inviting Chinese ministers to London later this year, and for the first time institutionalising climate change talks between both countries moving forward," the UK government said. Miliband will "urge continued action from China," the government added. The UK also plans to "refresh" a clean energy partnership with China, which will set out areas on which the two governments could "securely collaborate", such as hydrogen, carbon capture and storage, and phasing out coal. China is the world's biggest emitter but is also the biggest supplier of renewable energy globally and has significant refining and processing capacity for critical minerals that are key for the energy transition. And the country is rapidly increasing its renewable power. China's installed renewable power capacity rose to nearly 1.85TW at the end of 2024 , accounting for 55pc of total installed power capacity. The UK is typically viewed as a leader on climate action at talks such as UN Cop summits — a role the government has made clear it is keen to build on. A strong working relationship with China is more crucial than ever to ensure progress at climate talks this year, as US president Donald Trump's decision to pull his country out of the Paris climate agreement will shift the focus to other major economies. China portrayed itself as a reliable leader on climate at Cop 29 in November last year, including making concessions on the language used to describe its climate finance contributions. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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H2 sector wary as EU nears low-carbon rules: Correction


12/03/25
News
12/03/25

H2 sector wary as EU nears low-carbon rules: Correction

Corrects paragraph 7 to clarify that Hydrogen Europe's requests refer to CO2 intensity of upstream natural gas supply rather than fugitive methane emissions London, 12 March (Argus) — As the European Commission edges closer to publishing its long-awaited low-carbon hydrogen regulation expected this month, there is much at stake for prospective producers within the bloc but also potential overseas suppliers, according to industry association Hydrogen Europe. The European Commission said in its Clean Industrial Deal from late February that it intends to adopt a delegated act defining low-carbon hydrogen this quarter , following publication of a draft last summer and subsequent consultation with stakeholders. The EU has already set a CO2 emissions threshold of 3.38kg of CO2 equivalent for low-carbon hydrogen, but the delegated act will settle the details for a range of production pathways that do not fall under the EU's already-adopted definition of renewable fuels of non-biological origin (RFNBOs). These include electrolysis from non-renewable power such as nuclear or waste incineration, gas reforming with carbon capture, and methane pyrolysis. Hydrogen Europe is hoping that the adopted text — which would then require approval from the European Parliament and member states — will entail some changes it says are key to unlocking nuclear-powered hydrogen and to ensure a fair reflection of emissions from gas-based production. The association has urged the commission to allow companies buying nuclear power via power purchase agreements to factor this into their emissions calculations rather than having to use a default number that stems from the CO2 intensity of the respective country's grid. This is the only way that grid-connected projects could move ahead in countries with low renewables penetration and otherwise large swathes of production could potentially be ruled out, industry participants have said. The industry body has also stressed that the EU should let gas-based hydrogen producers use project-specific figures for the CO2 intensity of their upstream natural gas supply rather than a blanket number irrespective of the location. Project-specific figures will be used for upstream methane emissions from 2028 under a separate methane regulation, which could potentially advantage Norwegian producers with typically lower upstream emissions over producers in the Middle East and parts of the US. Hydrogen Europe's chief executive Jorgo Chatzimarkakis said the sector "desperately needs legal certainty" and complained that missing deadlines has "become standard rather than an exception" for the commission. Other industry participants have previously made similar arguments around emissions calculations for nuclear power and for upstream methane emissions and many have stressed the need for certainty around the definition. The rules are crucial because low-carbon hydrogen will be needed "in the market ramp-up phase" as "renewable hydrogen is not yet available in sufficient quantities or at sufficiently affordable prices," Chatzimarkakis said. Moreover, many renewable hydrogen projects will probably have to pivot their electrolysers to make low-carbon hydrogen in spare hours to shore up their business case. Curbing low-carbon hydrogen volumes with tight rules inadvertently weakens the case for investment in midstream infrastructure that is essential in the long term, Chatzimarkakis said. This debate on measuring the emissions of hydrogen production is the latest in a slew of painstaking procedures globally, as rule makers have tried to enshrine best practices without overly regulating the nascent industry. The EU took around two years to define renewable hydrogen and the process was hardly quicker in the US. The previous US administration of president Joe Biden clarified rules for its 45V hydrogen production tax credits in early January. It listened to pleas from producers and will allow them to use project-specific emissions calculations that might give the EU food for thought — although the future of the clean energy incentives including 45V is unclear following the return of Donald Trump to the White House in January . By Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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EU consults on decarbonisation, clean tech aid


11/03/25
News
11/03/25

EU consults on decarbonisation, clean tech aid

Brussels, 11 March (Argus) — The European Commission has opened a consultation on updates to its state aid rules, which aim to take into account the bloc's proposed clean industrial deal — designed to simplify and speed decarbonisation. The commission is aiming to publish the rules in June, following input from EU states. The updated state aid rules would then apply to how the commission decides on EU states' financing of projects up until the end of 2030. The draft provides for member states' simplified tender procedures for renewables and energy storage. The commission specifically notes the possibility of granting aid without tender for less mature technologies, such as renewable hydrogen. There would also be more flexibility for EU states aiding industrial decarbonisation, with a choice of tender-based schemes, direct support and new limits for very large projects. The commission lists batteries, solar panels, wind turbines, heat-pumps, electrolysers and carbon capture usage and storage among clean technologies that can be supported, as well as their key components and critical raw materials. Officials note the possibility of EU countries de-risking private investment. The rules, when adopted, would also allow for investment in storage for renewable fuels of non-biological origin (RFNBOs), biofuels, bioliquids, biogas, biomethane, and biomass fuels as long as they obtain at least 75pc of their content from a directly connected and related production facility. Aid can only be granted for biofuels, biogas, and biomass fuel production if compliant with the bloc's renewables directive. While the rules for biofuels are not new, they do reflect the wider scope of aid now foreseen by the commission. And officials say the rules allow for projects in the EU to receive aid from a member state if a comparably project would receive aid in a third country. The commission released its proposed clean industrial deal in late February . The deal targets a simplification of rules, to allow EU member states to aid industrial decarbonisation, renewables rollout, clean tech manufacturing and de-risking private investments. Today's consultation runs until 25 April. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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