Germany: Faster, higher, further - hydrogen import strategy and faster authorisations for electrolysers

The import strategy for hydrogen and hydrogen derivatives (in German) and the third ordinance amending the Ordinance on Installations Requiring Authorisation (in German) are intended to be important further steps on the path to a hydrogen economy. Such steps are also urgently needed in view of the faltering investments to date and the German government's forecast demand of 95 to 130 TWh of hydrogen and derivatives in 2030.

The import strategy and the acceleration of the authorisation of electrolysers must be seen in the overall context of the national hydrogen strategy and the plans for a hydrogen core network. The application recently submitted by the transmission system operators for the hydrogen core network (in German) envisages a pipeline length of 9,666 km and investment costs of EUR 19.7 billion.

While the core network covers the infrastructural requirements for hydrogen utilisation, the two measures now approved by the Federal Cabinet focus on securing the necessary quantities of hydrogen.

1. Faster authorisation of electrolysers

The German government's forecasts assume that between 30 and 50% of hydrogen demand can be covered by national production. In line with the national hydrogen strategy, electrolysers with a capacity of at least 10 GW are to be built by 2030.

To facilitate the expansion in the time available, it is also essential to speed up the approval process. In this context, the Federal Cabinet has now decided to streamline the authorisation procedure, which has been under discussion since the end of last year (see our report).

Currently, electrolysers that produce hydrogen on an industrial scale require a permit under immission control law, including public participation (number 4.1 Annex 1 of the 4th BImSchV). The authorisation requirement is based on the provisions of the Industrial Emissions Directive (Directive 2010/75/EU (in German)).

As part of an amendment to the European directive, the production of hydrogen by electrolysis of water up to a significant threshold value of the daily production capacity will be excluded from the scope of the directive. The German government intends to utilise this leeway.

Specifically, the amending ordinance stipulates that

• electrolysers with a rated electrical output of up to 5 megawatts are no longer subject to authorisation (under immission control legislation),
• electrolysers with a rated electrical output of more than 5 megawatts and a production capacity of less than 50 tonnes of hydrogen per day are subject to the simplified approval procedure pursuant to Section 19 BImSchG and therefore do not require public participation, and
• electrolysers with a production capacity of 50 tonnes of hydrogen or more per day must comply with the existing approval requirements.

The original draft of the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection’s amending ordinance still provided for cumulative differentiation according to production capacity and rated electrical output. With regard to the general authorisation requirements for electrolysers and the legislative history of both the Industrial Emissions Directive and the amending ordinance, please refer to our article from December 2023.

The amending ordinance still requires the approval of the Bundesrat. 

2. Hydrogen imports

The aim of the import strategy is to ensure a stable, secure, sustainable, and diversified supply of hydrogen and hydrogen derivatives. To ensure the necessary investment security, the strategy supports a diversified import product range (e.g. ammonia, methanol, naphtha and electricity-based fuels).

In terms of transport, the German government is pursuing the parallel development of import infrastructures for pipeline and ship transport. So-called "green corridors", which describe emission-free shipping routes, are also to be established.

The goals of the import strategy are to be achieved by establishing reliable demand, facilitating cross-border transport and diversifying sources of supply, among other things.

Demand is to be boosted by climate protection agreements that facilitate conversion and other funding instruments. At the same time, regulatory incentives such as EU emissions trading and the border adjustment mechanism (CBAM) should increase the use of hydrogen. The expansion of the transport and import infrastructure, for example in the form of the LNG Acceleration Act, should also enable an increase in demand.

The import strategy has already been criticised in press reports, as the measures and incentives described are considered not to be specific enough and to contain more of a summary of existing approaches than a concrete strategy. The coming years will show how the strategy will develop.

In addition to the federal level, hydrogen concepts are also being developed on the Länder (state) level,  For example, North-Rhine Westphalia in July 2024 published a concept (in German) that identifies areas of action for the state. These include building common goals with the industry, establishing international partnerships, making North Rhine Westphalia more visible as an offtake-market and continuative support for local hydrogen demand.

Please contact us if you have any questions. You can also find more information in our International Green Hydrogen Report 2024.