German government disavows blue hydrogen amongst criticism from steel industry

Clean hydrogen is seen as a potential key component to decarbonisation within the steel industry, which needs energy-dense fuels to generate high-temperature heat for their industrial processes. The European Commission has stated that it will play a key role to achieve the EU’s climate goals, saying that 24% of global energy demand in 2050 could be met with clean hydrogen.

“We need a massive ramp-up of hydrogen,” explained vice-chancellor Robert Habeck on 11 January in Berlin. The steel industry alone would require 'five times more hydrogen than currently planned for in all sectors', he added. To achieve this goal, Germany plans to double its hydrogen electrolyser capacity from 5GW to 10GW in 2030 as part of its upcoming 'easter package' of legislation.

However, Germany will make no subsidies available for so-called 'blue hydrogen', which is created by using fossil gas and sequestering the resulting CO² emission using carbon capture (CCS) technology. According to a 2021 report sponsored by the industry, hydrogen production based on natural gas could save Europe €2 trillion by 2050 because it can be based on existing gas infrastructure. An argument often put forward by blue hydrogen proponents is that it can help break the chicken-and-egg problem, where a lack of hydrogen production leads to a lack of demand.

“If we want to solve this chicken-and-egg issue, the time to get into the hydrogen economy is now and that would mean accepting different forms of hydrogen,” explained Sigfried Russwurm, president of the German industrial association BDI, on 13 January.

''We have to face the reality that these quantities of green hydrogen are neither realistic nor available today and in the coming years as the market ramp-up will happen slowly,” Russwurm stated. But despite all its supporters, blue hydrogen faces criticism due to the fact that fossil gas is a key material in its creation. Gas tends to leak from pipelines which have severe climate impacts, as methane is a potent greenhouse gas.

“We are yet to visit a country that does not have an alarming amount of methane pollution leaking or venting from oil and gas facilities,” said Jonathan Banks from the Clean Air task force, an environmental NGO. There are concerns that supporting blue hydrogen will create a lock-in effect into fossil fuel infrastructure. “Once you’ve invested in blue hydrogen, you are invested for 30 years,” said Tom Baxter, co-founder of the Hydrogen Science Coalition, a think-tank. As a consequence, he argues, blue hydrogen 'is not a stepping stone', rather a step backward in a long-term goal for decarbonisation.