German-Australian Hydrogen Alliance presents major opportunity for bilateral trade

By Dr Michael Zettinig, Deputy Executive Director and Director Governmental Affairs and Communications, German-Australian Chamber of Industry and Commerce

The German-Australian Chamber has massively ramped up its hydrogen activities over the last few months and continues to do so in 2021 – including through the newly formed German-Australian Hydrogen Alliance.

We have launched the German-Australian Hydrogen Alliance in late 2020 to establish an industry-focussed bilateral hydrogen initiative for the benefits of our member companies and other partners. Why have we done it? The background is the following:

After years of increasing importance, bilateral hydrogen activities got a massive boost in 2020 and will continue even stronger in 2021. There are several reasons for this highly dynamic field, starting with the government and policy support: Australia released a national hydrogen strategy in late 2019, followed by Germany in June 2020 and the European Union in July 2020.

Dr Michael Zettinig. Image credit: German-Australian Chamber of Industry and Commerce

A successful energy transition means combining the security of supply, affordability, and environmental compatibility with innovative and intelligent climate protection. It requires alternative options to fossil fuels currently in use. Hydrogen will play a central role in the further development and completion of the energy system transition. After all, hydrogen is enabling a significant CO2 emissions reduction, especially in industry and transport, through using renewable energies.

With the National Hydrogen Strategy, the federal government of Germany is creating a coherent framework for future production, transport, and further use of hydrogen – resulting in corresponding innovations and investments. It defines the necessary steps to help achieve climate targets, create new value chains for the German economy and further develop international energy policy cooperation.

With this background, the National Hydrogen Strategy pursues the following goals in particular:

• Establish hydrogen technologies as core elements of the energy transition to decarbonise production processes with renewable energies.
• Create regulatory conditions for the market ramp-up of hydrogen technologies.
• Strengthen German companies and their competitiveness by promoting research and development and the export of technology related to innovative hydrogen technologies.
• Securing and shaping the future national supply of CO2-free hydrogen and its derivatives.

To achieve these goals, 7 billion EUR will be made available for the market ramp-up of green hydrogen and another 2 billion EUR to foster international partnerships. By 2030, a production capacity of five gigawatts (GW) is to be achieved, which is to increase by a further 5 GW by 2035, 2040 at the latest. The strategy includes 38 measures to start the ramp-up until 2023 and to strengthen it by 2030. One of these measures is to exempt green hydrogen production from the EEG levy, making future economic viability much more likely.

The German and European strategies focus on developing so-called “green hydrogen” – hydrogen produced from renewable energy sources. The Australian strategy uses the broader term of “clean hydrogen” that includes both green and blue hydrogen (hydrogen produced from natural gas which captures emissions using carbon capture and storage).
In addition to other energy-related activities such as energy efficiency measures and the expansion of renewable energy production, green and clean hydrogen offer significant opportunities to decarbonise German industry and a potentially massive new export industry for Australia, either in the form of hydrogen or ammonia as this is easier to store and transport. Through hydrogen, there is also the possibility to produce Green Steel. Of course, Australian exports would not necessarily go to Germany, but there are also large regional markets in countries like Japan, South Korea, or Singapore.

On the bilateral level, three major initiatives are working closely together to deepen bilateral hydrogen collaboration: Australia and Germany have established an Energy Working Group, including a Hydrogen Sub-Working Group. Last year both governments also announced a jointly funded two-year Feasibility Study into a renewable energy-based hydrogen supply chain between the two countries. The “HySupply” study and the study consortium are led by UNSW on the Australian side and BDI / acatech on the German side.

The German-Australian Chamber is closely collaborating with both initiatives and has engaged in hydrogen activities over several years. These include hydrogen business delegations and our involvement in the German-Australian energy partnership (funded by the German Federal Ministry for Economic Affairs and Energy based on a decision by the German Bundestag). Hydrogen related industry delegations between Germany and Australia will also happen in 2021, albeit as virtual delegations.

Many of our members are increasingly active in all parts of the hydrogen supply chain. Not only that – the timing for available German Government funding to support international hydrogen projects is tight. We, therefore, decided that the German-Australian Hydrogen Alliance would perfectly complement existing initiatives. The Alliance will collaborate with all bilateral stakeholders, including the Australian Hydrogen Council and the Konrad Adenauer Stiftung Australia and the Pacific. We also had the great pleasure of organising a webinar with Australian Energy Minister Angus Taylor and the German Ambassador to Australia, H.E. Dr Thomas Fitschen, on bilateral hydrogen opportunities.

The Alliance will share information about bilateral hydrogen opportunities. More information about the work program will become available from February via its dedicated LinkedIn page. The group is open to companies small and big and from every aspect of bilateral hydrogen projects, from project management, finance, insurance to storage, distribution, take-off and electrolysers.
When appropriate, we will also share information about available funding opportunities through German or Australian government programs though the Alliance.
We cannot wait to work with German and Australian businesses to deepen the bilateral hydrogen collaboration in 2021 and beyond.

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