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Heavyweights in German industry dispel all doubts about a market for green hydrogen. There is already a great demand for hydrogen produced in Denmark, is the clear message from a number of the German big consumers. Danish companies are calling for clarification on the financing of the hydrogen pipeline, which can provide certainty for investments ahead of future offshore wind tenders and make it possible to export large quantities of hydrogen to our German neighbours.
German companies have an enormous need for green hydrogen as part of their green transition, and with the prospect of government investments worth almost 20 billion euros in 9,700 kilometers of hydrogen pipes, large parts of the roadmap for German hydrogen infrastructure are in place.
But the hydrogen must come, among other things, from Denmark, where a decision still needs to be made on investments in the pipe that will make the hydrogen flow across the border.
Both German authorities and companies want a quick clarification in the hope that Danish companies can be ready to deliver green hydrogen south of the border by 2028 at the latest.
- We need three building blocks: The infrastructure and regulation are in place. Now we lack the third, which is hydrogen, and this is where you come into the picture, said Philipp Steinberg, Director for Economic Policy in the German Ministry of Economy and Energy, when a large number of German and Danish actors gathered on Monday for conference in Copenhagen.
- Hydrogen is no longer a plan. The future is here now. Let's get started, was the clear call from Steinberg.
German industry: The need is enormous
"The chicken or the egg" has long been discussed when it comes to supply and demand on the market for green hydrogen. But Germany's industrial heavyweights are now putting their hands on the stove and are ready to purchase large quantities of hydrogen when, according to the parties to the agreement, the hydrogen pipeline must be ready in 2028.
This applies, among other things, to German BASF, one of the world's leading companies in chemical production, is a major consumer of hydrogen, which is a key raw material in chemical production.
- The demand is already there, states Mark Meier, deputy director for the Nordic and Baltic part of BASF.
- Every ton of hydrogen that Denmark can produce will be a competitive advantage. Not just for us, but for Europe, he says.
Today, BASF produces hydrogen using fossil fuels. But if the chemical manufacturer is to achieve its goal of a 25 percent CO2 reduction in 2030 and full CO2 neutrality in 2050, large amounts of hydrogen from renewable energy sources are needed. This will save the company two to three million tonnes of CO2.
That is why the German industrial company stands ready with open arms as a purchaser of green hydrogen from Denmark.
So does Germany's largest steel producer, Thyssenkrupp Steel, which accounts for emissions equivalent to 2.5 percent of Germany's total CO2 emissions.
- That is why it is really important that we do our homework, Torsten Zock, Manager Hydrogen & Green Energy, Thyssenkrupp Steel points out.
The steel giant is facing an important transition with a target of 30 percent reductions in 2030.
The transition requires access to large quantities of hydrogen, and already in 2028 Thyssenkrupp predicts a need of 4.1 TWh increasing to 30.2 TWh in the years after 2030. The steel producer therefore also confirms the great need to import hydrogen from i.a. Denmark.
- The connection to Denmark is important to us, and we believe and hope that it will be available in 2028. We need a solid backbone which makes it possible to import, says Torsten Zock, who could also announce that the company next year opens up a new supply of hydrogen.
Financing must be clarified
But in order for Danish companies to succeed in becoming major suppliers of hydrogen to the German industrial companies, an important piece is missing. A decision must still be made on financing the Danish part of the hydrogen infrastructure.
Here, speed is crucial – in particular for the sake of the project developers who next year have to submit bids for state-owned offshore wind farms.
- When we make our bids for the upcoming offshore projects, we can choose to increase capacity by 'overplanting.' If we do that, it is absolutely crucial that we have access to the market. There is therefore a need for certainty about the hydrogen pipeline when we make our valuation of the areas, says Peter Biltoft-Jensen, Chief Regulatory Advisor P2X & Markets in Ørsted.
Therefore, the state should be inspired by the German financing model and provide a state guarantee to the infrastructure developers.
- Before next summer, we would like to see a state guarantee for the infrastructure to be built. This is not the same as the state having to pay for it. It will still be commercial parties who pay via tariffs, says David Dupont Mouritzen, director of PtX Advocacy & Regulatory Affairs at Copenhagen Infrastructure Partners.
- It is a large investment that must be made in infrastructure. But if you look at all the investments that need to be made in renewable energy, infrastructure is a fraction of what needs to be.
Translation from https://greenpowerdenmark.dk/nyheder/tyske-industri-efterspoerger-dansk-brint-stor-stil
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