Get started despite uncertainties – cornerstones of an adaptable hydrogen strategy

Green hydrogen and e-fuels are undoubtedly necessary for Germany’s path towards climate neutrality in 2045. However, unlike renewable electricity from wind and solar, we have not yet made any practical use of these energy sources. Therefore, the debate is still based on very different estimates as to when and what quantities of hydrogen will be available, and at what prices. Even the five scenario analyses currently receiving the most attention show wide ranges for the use of hydrogen and e-fuels, at least in the long term. But what do we know for sure, where do uncertainties remain, and how can policymakers now quickly make robust decisions? In a new paper from the Kopernikus project Ariadne, funded by the German Federal Ministry of Education and Research (BMBF), experts from six institutes now present key points for an adaptable hydrogen strategy.

Direct electrification or hydrogen, electrons or molecules? “For the path towards climate neutrality in 2045, it is no longer a question of either or, but of both,” explains Falko Ueckerdt of the Potsdam Institute for Climate Impact Research, one of the authors of the paper. But green hydrogen and e-fuels are still very young technologies, and thus hold many unanswered questions. “For policymakers, this results in the special challenge of navigating in a goal-oriented way despite technical imponderables,” says Ueckerdt. “We have therefore examined competing guiding principles in the hydrogen debate, and compared plausible hydrogen paths, along the five major scenario analyses¹Ariadne, 2021; BDI, 2021b; BMWi, 2021a; dena, 2021; Prognos, Öko-Institut, Wuppertal-Institut et al., 2021² currently available. As a result, we present key points to provide orientation for an adaptive hydrogen strategy and necessary learning processes.”

Wide bandwidth does not stand for leeway, but for uncertainties and risks

The dossier by experts from six institutes of the Ariadne consortium shows that the role of hydrogen and e-fuels in the coming years is limited primarily by their low availability, and thus that hydrogen plays only a small role for the time horizon to 2030. To be on course for climate neutrality in 2045, renewable energy capacities should be tripled in a “Decade of Electrification”, battery electric vehicles should dominate new car registrations and about 5 million heat pumps should be installed. At the same time, however, the market ramp-up of hydrogen must already be pursued with great political vigour.

After 2030, the range of scenarios regarding hydrogen and e-fuel use is indeed wide. However, this should not be interpreted simply as technological or political leeway, but primarily as a space of uncertainties. Technological uncertainties require a step-by-step approach and ongoing adaptation of the hydrogen strategy in line with learning processes, the authors of the Ariadne paper conclude. As long as there is uncertainty about feasible hydrogen volumes and prices, hydrogen should be used primarily when there are no alternatives for direct electrification (for production of ammonia or steel, for example) and for e-fuels used in long-haul aviation or shipping. Hydrogen from fossil sources is also conceivable as a temporary bridge technology, but must be accompanied by certification, regulation and corresponding pricing of emissions. This is the only way to ensure that greenhouse gas emissions are actually reduced and not merely shifted.

A successful hydrogen strategy is embedded in a climate protection strategy

“Over the next few years, it will become increasingly clear what hydrogen costs and volumes are feasible and to what extent hydrogen use can be gradually broadened after an ambitious and focused start,” says Benjamin Pfluger of the Fraunhofer Institute for Energy Infrastructures and Geothermal Energy IEG, one of the study’s authors. Hydrogen usage remains an issue because its use circumvents certain challenges in direct electrification. As we accelerate the expansion of renewables and electrification by 2030, which is absolutely necessary to meet climate change goals, we will learn more about their long-term limitations. “With this knowledge, market actors and policymakers can make better decisions about where to use hydrogen, and thus shape the energy systems of the future. If, on the other hand, widespread availability of low-cost hydrogen and e-fuels is relied on now and these expectations are not fulfilled, there is a risk of a fossil lock-in, high costs and a failure to meet climate targets,” Pfluger says.

Ariadne experts emphasise that a successful hydrogen strategy must be embedded in a climate change strategy that takes into account the uncertainties of both hydrogen and e-fuels, as well as direct electrification. This integrated strategy does not need to commit to a hydrogen mission statement or a long-term path for the entire energy system. Instead, it enables policymakers to initiate joint learning processes with industry, science and society, and to respond adaptively as new knowledge emerges.