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3rd Munich Hydrogen Summit – Key Insights and Takeaways30 October 2024

The key takeaways were:

"Rapidly rising hydrogen demand requires the use of both green and blue hydrogen."

electrolyser capacity will play a central role in meeting Germany’s estimated hydrogen demand of up to 700 TWh by 2050. However, roughly 60% of all existing electrolysers are located outside of Europe, primarily in China. With investment in electrolysis plants being an upward trend worldwide there are realistic chances for further expansion of the electrolysers’ capacity in Germany;
rapidly rising hydrogen demand requires the use of both green and blue hydrogen. Blue hydrogen projects have a much higher capacity than green ones, highlighting their importance in the transition phase. Green hydrogen will nevertheless be more important in the long-term. However, the lack of a low-carbon hydrogen standard currently creates a regulatory gap; and
the Middle East region, including the GCC countries, benefit from low electricity costs making them an important location for hydrogen generation. Regarding exports strategy for hydrogen, Europe is one of the key targets, so EU regulations are closely followed. Asia is also expected to be a large offtaker going forward however, leading to potential competition for capacity.

the expansion of hydrogen production is supported by the development of a 9,700 km core network in Germany using 60% of existing gas pipelines to balance supply and demand by 2032. Construction has now been approved by the German government, meaning national transport grid operators can begin with the roll-out, relying on a state-backed initial grid usage fee system including bridge financing elements provided by KfW and further risk mitigation measures;
imports will play a central role in meeting national demand, as neither Germany nor the EU will be able to produce enough hydrogen to meet domestic demand in the near future. Expanding pipelines will be crucial to secure imports. The biggest challenge for the development of an international hydrogen infrastructure is financing, although business models already exist. Hydrogen storage wis also crucial to ensuring market flexibilty; and
cross-border pipeline projects will help to ensure the long-term transport of hydrogen across Europe. Important destinations include Austria, France, Czechia and Denmark. Other key supply corridors are the North Sea, Southern Europe, North Africa and Scandinavia. Whist there have been several delays involving final investment decisions recently, pipeline expansion is likely inevitable in the long run given transport costs.

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"Cross-border pipeline projects will help to ensure the long-term transport of hydrogen across Europe."

the transport sector is a key enabler for initial hydrogen projects. Beside public bus fleets, hydrogen-powered trains will be a significant step towards the decarbonisation of public transport, with projects already underway that envisage the exclusive use of green hydrogen. Current projects are nevertheless rather small scale and, whilst the technology is ready to use, demand is remains limited;
sustainable aviation fuels (“SAFs” and “eSAFs”) will become increasingly important in the aviation sector with hydrogen derivatives playing a central role in meeting EU regulations. This could pave the way for low-emission aviation. Projects such as HyKero (Important Project of Common European Interest (“IPCEI”)) aim to produce large quantities of green hydrogen to supply aviation with sustainable fuel. HyKero could produce up to 53,000 tonnes of power-to liquid (“PtL”) SAF, 11,000 tonnes of naphtha and green hydrogen annually. From a financing perspective, e-fuel projects are of special interest, as EU and national regulations provide for mandatory quotas in aviation, stimulating the development of a sustainable demand; and
pure hydrogen as such has very limited potential to become a ship fuel due to low energy capacity. Despite this, more sustainability in shipping can be achieved through green hydrogen-based e-fuels such as eMethane and eMethanol.

reliable regulatory framework conditions are essential for accelerating the expansion of the hydrogen economy, especially regarding long-term contracts and the financing of new projects. The planned Hydrogen Acceleration Act (Wasserstoffbeschleunigungsgesetz) in Germany, which is expected to come into force in 2025, aims to streamline and expedite planning, approval and procurement processes, thereby reducing regulatory requirements; and
one of the biggest obstacles for non-EU projects is the lack of certification for green hydrogen. Projects outside the EU face the challenge of not being able to certify their products sustainable, which makes it difficult to integrate them into the EU market. There is a lack of a standardised certification system that could link projects outside the EU with EU projects. However, in September 2024, the European Commission approved technical programs of three voluntary certification schemes (ISCC, REDCert and CertiHy) which will likely be the first to receive full recognition as ‘EU Voluntary Scheme’ as set forth in the Renewable Energy Directive III (RED III) and Delegated Acts.

To find out more about this event and download the presentation slides, click here.

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