Germany and the UK have signed a joint declaration of intent to work together to drive the development of the low-carbon hydrogen sector, with a focus on growing international trade and accelerating the deployment of production projects.

The two countries aim to establish “international leadership” on hydrogen markets by setting safety and regulatory standards to support trade. They also plan to cooperate on market analysis to support planning and investment by government and industry, and work to make hydrogen technologies cheaper and more accessible.

“With this declaration, we are on our way to jointly help developing the European and international markets for hydrogen,” said Philipp Nimmermann, Germany’s State Secretary for Energy. “Our cooperation will not just involve trading of hydrogen and its derivatives, but also cooperation on technologies and innovation in this field, which will be of mutual benefit for both Germany and the UK”.

“We are on our way to jointly help developing the European and international markets for hydrogen” Nimmermann, German energy secretary

Martin Callanan, UK Minister for Energy Efficiency and Green Finance, said the two countries are “natural partners” in driving forward low-carbon hydrogen.

“This agreement will underpin the development of this new fuel not just for our respective countries but also for an international trade that could be transformative in our work towards achieving net-zero emissions by 2050,” he said.

The agreement comes at a critical time for both countries’ hydrogen ambitions as sluggish progress on bringing proposed production projects to FID threatens their 2030 targets.

The IEA has said that only 4% of announced production projects globally have reached FID. A challenging economic environment is “testing the resolve” of developers and policymakers to follow through on planned projects, IEA Executive Director Fatih Birol said.

Both governments are supporting the hydrogen sector through a range of subsidies.

The UK has a £240m ($292m) Net Zero Hydrogen Fund for capital support and a Hydrogen Production Business Model that offers revenue support for projects. In Germany, the government is supporting the implementation of the National Hydrogen Strategy with funding from the Climate and Transformation Fund.

Germany in particular has been working hard to lock in supplies from exporters globally as it is expected to need to cover at least half of its projected demand through imports. It also sees hydrogen as a key contributor to its long-term energy security as it rebuilds its supply base following the cessation of natural gas imports from Russia. The UK’s potential as an exporter remains unclear, with much of its planned production expected to be consumed domestically in low-carbon industrial clusters.

Close ties

At a corporate level, the UK and Germany already have close ties in the renewables and hydrogen sector. Uniper and RWE, Germany’s two biggest energy utilities, are investing in low-carbon hydrogen in the UK. Uniper recently unveiled plans to develop a large-scale electrolytic hydrogen production plant at the site of its coal-fired Ratcliffe-on-Soar power station in Nottinghamshire in England’s East Midlands region.

Uniper’s plan for the site involves the commissioning of 100MW of electrolysers in the second half of the 2020s and up to 500MW by the turn of the decade.

“Hydrogen projects in the UK are an essential part of Uniper’s new strategy and its implementation,” said Michael Lewis, CEO of Uniper.

UK electrolyser manufacturer ITM Power is set to open offices in Germany in October as it targets that market as well as the wider EU. ITM CEO Dennis Schulz welcomed the two governments’ agreement. “An effective hydrogen economy can only take shape if countries form alliances like this one. Germany is a very significant market for hydrogen and for ITM Power,” he said. “We are currently building several hundreds of megawatts of electrolyser capacity for projects in Germany, some of which are among the biggest projects in the world.”

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Author: Stuart Penson