- Germany aims to shift to hydrogen from fossil fuel
- Investors may see the move as another reason to reconsider fossil-fuel investments
- The country’s efforts are another illustration of the global shift to cleaner energies
The German government is setting up deals ahead of the two-day Berlin Energy Transition Dialogue conference later this month, where it plans to announce how it will cut coal, oil and natural gas pollution by shifting to hydrogen.
At least 20% of Germany’s hydrogen is to be produced from renewable energies by 2030, according to a draft of the plan circulated earlier this year, EURACTIV Germany reported.
“We will now set the course for Germany to secure its global pioneering position in hydrogen technologies,” the government paper is reported to have said.
Germany and the rest of the European Union member countries are expected to lay out their visions this year on how the bloc can reach its region-wide goal of net-zero greenhouse gas emissions by mid-century in line with the Paris Agreement on climate. Germany’s Ursula von der Leyen serves as the European Commission’s president, giving Chancellor Angela Merkel’s government more incentive to lead the effort.
Investors may see Germany’s initiative as more evidence that the time has arrived to shift their money from fossil-fuels to less-polluting alternatives. Some investors have already started that move, with U.S. funds focused on sustainability attracting a record $20.6 billion of new assets in 2019, according to Morningstar.
Hydrogen, the world’s most abundant element, is considered an attractive alternative to fossil fuels because it creates only water vapor when burned and it can supply the high temperatures needed by industries like steelmaking and oil refining.
Even so, like all green technologies hydrogen comes with a downside. Current production processes involve pulling it from methane — natural gas — using energy-intensive methods. Last year, Germany said it would be willing to spend more than $110 million a year annually on the research of hydrogen technologies to help the country become a world leader in finding a cleaner way to use hydrogen.
In January, Germany signed a deal with Nigeria to research hydrogen supply chains in West Africa, in part to ease ministers’ concerns that the shift would leave the country too dependent on a few suppliers including Russia and OPEC nations, Bloomberg reported.
The Hydrogen Council projected that the cost of hydrogen production, distribution, equipment and component manufacturing will decrease by as much as 50% by 2030 for a wide range of applications. The drop in costs would make hydrogen competitive with other low-carbon alternatives, the industry group said last month.
New technologies may soon make driving a hydrogen-powered car an economical option, according to speakers on a Boundless Impact Investing webinar last month.
(Photo by Adam Berry/Getty Images)
