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Green hydrogen and Power-to-X ideas for a hydrogen strategy with a future

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1 Green hydrogen and Power-to-X ideas for a hydrogen strategy with a future Position paper Stand:

2 2 Introduction In order to meet the climate targets, immediate and comprehensive emission reductions in the areas of energy, industry, buildings and transport are necessary. This can only be achieved if we consistently focus on energy efficiency, the expansion of renewable energies (RE) and sustainable lifestyles and economic practices. The use of renewable hydrogen and other synthetic energy sources will also play a role. Hydrogen and Power-to-X substances are booming in the current political debate: There is hardly a sector in which they are not traded as an important means of reducing emissions. Deutsche Umwelthilfe also sees the use of hydrogen and PtX substances as an important contribution to defossilization in some sectors. But caution is advised. Hydrogen and PtX substances are no panacea. Only if they are produced under strict sustainability standards and completely from renewable energies can they serve as a supplementary means of reducing emissions in certain applications. However, in many areas their use would be inefficient and costly. An accelerated switch to renewable energies, the reduction of energy consumption, energy efficiency increases in all sectors and a comprehensive mobility transition remain the most important challenges in climate protection and must be a clear priority for politics. In the following we summarize green hydrogen and hydrocarbons based on it under the term PtX substances. All requirements at a glance Climate and environmental criteria must come first in a hydrogen strategy. Only renewable hydrogen can be part of the energy transition. The promotion and import of blue or turquoise hydrogen must be excluded. Binding sustainability standards must apply to the production of green hydrogen and PtX substances. For the entry into hydrogen and PtX substances, domestic generation with additional renewables expansion has priority. No import as long as the electricity sector in the countries of origin is not based entirely on renewable energies. Carbon procurement for the upgrading of hydrogen exclusively from the air. The use of hydrogen and PtX substances must be restricted to sectors in which there is no alternative to defossilization. At the same time, all potentials for reducing requirements and increasing efficiency must be exploited. No unilateral preference for hydrogen and PtX substances due to special regulations. New gas infrastructure at national and European level must be compatible with climate targets. Accelerated expansion of renewable energies and increased efficiency remain priorities for the energy transition.

3 3 Positions and demands of the DUH: Hydrogen and PtX substances as a component of the energy transition 1. Climate and environmental criteria must come first in a hydrogen strategy PtX application areas, production standards and funding instruments must be based on three key questions on GHG reduction potential, efficient use as well as sustainable availability and scalability: z GHG reduction potential: Does the PtX material enable significant real greenhouse gas savings in the overall system and can it be produced and used completely emission-free? PtX substances must be evaluated in the context of the climate crisis and the necessary rapid switch to a climate-neutral economy. Against the background of the zero emissions target, only those PtX substances are sustainable that enable real greenhouse gas reductions and can be produced and used completely emission-free. z Efficient use: Is the use of the PtX substance efficient in terms of energy and resource requirements compared to all other reduction options? Renewable electricity as a central sustainable resource is a valuable and scarce commodity that must be used efficiently in order to enable cross-sectoral defossilization. Due to high conversion losses, PtX materials have a low level of efficiency. Direct use of electricity, increased efficiency and a reduction in energy requirements therefore always have priority. z Sustainable availability and scalability: Can the PtX material (now and in the long term) be produced in a sustainable manner, and at least in the medium term in the amount necessary for relevant greenhouse gas savings? Hydrogen and PtX substances must also be considered from the point of view of sustainable availability and scalability. For example, in order to reduce greenhouse gas emissions from road traffic as quickly and comprehensively as necessary, only solutions that are available in the short term, sustainably and on a relevant scale can be considered. Any conflicts with the protection of ecosystems and biodiversity must be taken into account when assessing sustainability. With regard to the availability of resources, competition for use with other sectors (which must also be defossilized) must be taken into account.

4 4 2. Only renewable hydrogen can be part of the energy transition. The promotion and import of blue or turquoise hydrogen must be excluded. Sometimes green and blue hydrogen are summarized under the term CO 2 -neutral hydrogen. This suggests that both production methods are equivalent from a climate point of view, which is wrong. Blue hydrogen is based on the use of fossil natural gas. In order to make it climate-neutral, the CO 2 generated during production is to be captured and stored in underground repositories for an indefinite period of time. However, carbon capture and storage (CCS) technology is a risky pseudo-solution: z Depending on the CCS process, up to 35% of the CO 2 still escapes into the atmosphere, and there are also high upstream emissions from the extraction and transport of natural gas. The storage of the CO 2 causes additional emissions. In total, up to 218 CO 2 eq per kilowatt hour of blue hydrogen 1 is definitely not a climate-friendly, let alone climate-neutral option. There is a high risk of leakage: there is no guarantee that the underground deposits will remain tight for millennia, even during seismic activity. z CCS is extremely unpopular. The attempt to make CCS landfill possible on land failed in Germany as early as 2012 due to widespread public resistance. Turquoise hydrogen is also based on the use of fossil natural gas with the corresponding high upstream chain emissions. Energy consumption, costs, industrial scalability and risks are completely unexplained when it comes to the permanent binding of solid carbon. CCS does not serve to protect the climate, but acts as a fig leaf for the long-term preservation of fossil fuel business models. Instead of future generations with enormous CO 2 repositories

5 5 burdening ecological and economic contaminated sites, we have to consistently get out of fossil fuels. Only green hydrogen based on renewable electricity and corresponding PtX-derived products can contribute to climate protection. From an industrial policy perspective, too, green hydrogen has a clear advantage: While the value chains remain abroad when importing blue hydrogen, the domestic promotion of green hydrogen technologies creates new industrial policy opportunities for Germany. Industrial scaling is a prerequisite for the competitiveness of green hydrogen. This can only succeed if the door is not pushed open to other technologies (CCS). From this point of view, too, the use of blue / turquoise hydrogen for the transition is a mistake. 3. Mandatory sustainability standards must apply to the production of green hydrogen and PtX substances. Green PtX substances do not automatically guarantee reduced greenhouse gas emissions. There is even a significant risk of increased emissions if sustainable and climate-friendly production is not ensured from the outset by means of binding rules. The production of renewable PtX materials is extremely resource-intensive. All resource flows as well as systemic and indirect effects of PtX production must be taken into account when developing sustainability standards. Otherwise there is a risk of a repetition of the biofuel disaster, in which quotas without sustainability criteria have led to the ramp-up and lock-in of extremely climate-damaging production models. The most important factors for evaluating the climate impact of PtX substances are the power source for the electrolysis and, for PtX secondary products, the carbon source. In addition, other valuable resources are required for PtX production, in particular water and space. The need for water for electrolysis can exacerbate existing water shortages in dry regions or require the construction of desalination plants. The need for large RE preferred areas for green electricity production and possibly additional areas for CO 2 separation from the air competes with other land uses, e.g. for direct use of renewable electricity, agriculture or nature conservation. In order to exclude ecologically or socially negative consequences at the local level, the construction of PtX systems at home and abroad must always be preceded by a comprehensive evaluation of the effects at the local level, with the participation of the local population. In the case of PtX substances, which are themselves greenhouse gases, leakages in the overall system must be prevented as far as possible, especially in global supply chains and on long transport routes. This applies above all to the extremely potent greenhouse gas methane, which, according to the IPCC, has an 84 times higher greenhouse gas effect than CO 2 over a period of 20 years. Even the leakage of small amounts of methane has an enormous climate-damaging effect. 4. For the entry into hydrogen and PtX substances, domestic production with additional renewables expansion has priority. No import as long as the electricity sector in the countries of origin is not based entirely on renewable energies As long as there are still relevant shares of fossil fuel generation in the electricity system, the substitution of fossil fuels with PtX substances can significantly increase emissions in the overall system. For example, based on today's electricity mix, a hydrogen-powered fuel cell vehicle causes 50% more emissions, an e-fuel powered vehicle even 250% more emissions than a diesel car.2. additional renewable electricity can be generated. Since green surplus electricity will not be available in sufficient quantities, the expansion of renewable energies must be accelerated even further and go hand in hand with the development of PtX production. PtX substances do not become green by buying certificates of origin for green electricity. Because if the enormous electricity demand for PtX production is offset elsewhere by increased use of fossil electricity, this leads to high overall emissions. This makes an additional expansion of renewables necessary and must also be taken into account when planning the amount of electricity for the expansion targets. In the long term, Germany will have to import PtX substances. However, such imports may only take place if 100% renewable energies are used in the electricity sector of the countries of origin or a corresponding strategy is well advanced. When starting PtX production, the focus must initially be on domestic production in Germany.

6 6 Deutsche Umwelthilfe is calling for 5 GW of electrolysis capacity to be built up in Germany by 2025, supported for example by means of a tendering model. In addition, a pilot tender for hydrogen generation in combination with offshore wind should be carried out. This scaling serves a further degression of the PtX technology and strengthens the plant construction in Germany. Any minimum quotas should not relate to the gas network as a whole or to total gas consumption, but should be specifically formulated for the sectors in which the use of hydrogen or PtX substances is necessary due to the lack of other defossilization alternatives. 5. Carbon procurement for the refining of hydrogen exclusively from the air If hydrogen is processed into gaseous or liquid PtX fuels, carbon must be added in the form of CO 2. The CO 2 source is an important factor for the climate balance of PtX substances. CO 2 from the air is the only sustainable CO 2 source for PtX production. However, the technology for separating CO 2 from the air is immature, requires a lot of space and resources, and is very expensive. Targeted funding measures for the further development and scaling of the technology are necessary. Deutsche Umwelthilfe rejects the use of CO 2 from fossil combustion in industrial processes. The creation of a market for the raw material CO 2 from combustion processes undermines the defossilization of the industrial sector and risks high additional emissions in the overall system. CO 2 emissions must be reduced in real terms and not shifted from one sector to another. The use of CO 2 from biomass combustion is also not an acceptable source of carbon. The cultivation of biomass for energy generation has to be strongly curtailed due to the enormous damage to the climate and the environment. The available quantities of sustainable biomass residues are too small to scale PtX production. Sustainable biogenic CO 2 sources are generally not available, particularly at locations that are favored by renewable energy sources 3.

7 7 6. The use of hydrogen and PtX substances must be restricted to sectors in which there is no alternative to defossilization. At the same time, all potentials for reducing demand and increasing efficiency must be exploited. PtX materials are significantly more inefficient (and therefore more expensive in the long term) than direct electricity use due to high conversion losses. For example, compared to a battery-electric vehicle, a fuel cell vehicle powered by hydrogen requires three times the amount of energy per kilometer and a combustion vehicle powered by liquid e-fuel requires five to seven times the amount of energy per kilometer 4. In some sectors in which direct electrification is not possible, green PtX Substances after reducing demand and increasing efficiency, however, represent the only possibility of defossilization. These include the steel and chemical basic industry, industrial high-temperature processes as well as air and sea transport. In the future, enormous competition in demand between these sectors and on the world market as a whole is to be expected for renewable hydrogen and PtX-derived products. The necessary technical production capacities are currently not even available, and even with an optimal scaling process, only limited quantities of green hydrogen and no relevant quantities of e-fuels will be available before 2030. For the reasons mentioned inefficiency, costs, competition for use and (also in the medium term) limited availability, the use of PtX substances is only possible if no alternative reduction options are (any longer) available, i.e. z in sectors in which fossil fuels cannot be otherwise substituted are; and z as a last resort after exhausting all potentials for reducing demand (e.g. by recycling steel, shifting traffic from air to rail), increasing efficiency and sufficiency. A look at the magnitudes underscores this: In order to cover the current energy demand in German air traffic with e-fuels, an increase in renewable electricity generation in Germany by 140% would be necessary. 5. It is clear: we must primarily avoid and relocate air traffic before E -Fuels are used as the last additional option. Wherever there are better alternatives, the use of PtX substances must be excluded. This is the case with building heating and car traffic, where with heat pumps or electromobility in combination with efficiency, sufficiency and a mobility transition, significantly more efficient, cheaper and less risky solutions are already available today. In heavy goods traffic, too, due to the much higher efficiency, the focus should predominantly be on electrical solutions. Shift to rail and battery-electric trucks have priority over the use of PtX fuels. The necessary transport and storage infrastructure for the large-scale use of hydrogen in transport has so far been lacking anyway. It does not make sense to set up these at high costs for a more inefficient drive technology in addition to the charging infrastructure. False hopes in PtX technologies cost valuable time. The automotive industry should seriously turn to e-mobility instead of relying on e-fuels and thus delaying the turnaround in traffic. In any case, PtX fuels are not available for the comprehensive CO 2 savings that will be necessary in traffic by 2030. There is also a threat of lock-in in inefficient gas heating in building heating. Instead, the focus must be on reducing the energy requirement for the provision of heat by significantly increasing the renovation rate and depth of renovation, as well as raising efficiency requirements for new buildings. The installation of new gas heating systems must be banned from 2025. 7. No unilateral preference for hydrogen and PtX substances through special regulations When promoting hydrogen and PtX production, the existing regulatory framework must not be weakened by special regulations. Often the demand is made to exempt the operators of electrolysers and PtX systems from paying the EEG surcharge and network charges.But as additional EE electricity consumers and grid users, PtX producers must also contribute in a suitable form to the costs of the accelerated expansion of renewable energy systems as well as the maintenance and expansion of the grid. A special exemption from these taxes for PtX producers would be at the expense of the remaining payers, including private households and non-energy-intensive industrial companies.

8 8 Crediting hydrogen and e-fuels towards the CO 2 fleet limit values ​​or equating PtX substances with biogas in building heating would also be counterproductive. The CO 2 fleet limit values ​​provide an important incentive for vehicle manufacturers to switch to more efficient and increasingly electric vehicle technologies. A relaxation of the regulations in favor of inefficient PtX substances would undermine this steering effect and ultimately increase energy consumption in road traffic. This would undermine the efficiency first principle in building heating. 8. New gas infrastructure at national and European level must be compatible with climate targets. The use of gaseous energy sources will decrease in the future. Existing gas infrastructure is long-lived, in some cases has already been written off and should continue to be used where necessary. For example, it is conceivable that local hydrogen islands (networks) will be created in order to connect PtX systems with industrial customers. It is also conceivable that an existing pipeline will be used to transport hydrogen in the future. Here regulation must create clarity and reliability for investment security and avoid stranded investments. Basically, climate protection must come first when planning and expanding the gas network. In future, only those new and expansion projects may be pursued that are compatible with the climate targets and for which there is a prospect of converting to hydrogen. 9. Accelerated expansion of renewable energies and increased efficiency remain priorities for the energy turnaround The production of green PtX substances requires enormous additional amounts of renewable electricity and can only serve those applications that cannot be defossilized by direct use of renewable electricity. This underlines once again the need to accelerate the expansion of renewable energies and to increase energy efficiency in all areas. In order to make the energy transition possible, the federal government must promote wind and solar energy much more strongly than before. If it continues to apply the brakes when expanding renewables, the vision of a green hydrogen economy will automatically fail.

9 9 Technical principles Hydrogen can be produced from water with the help of electrical energy (electrolysis). If all of the electricity used comes from renewable energies (EE electricity, green electricity), one speaks of green or renewable hydrogen. Currently, only an extremely small part of the hydrogen used in industry is obtained from electricity. Conventional methods of hydrogen production are based on the steam reforming of fossil natural gas, which results in significant greenhouse gas emissions. One speaks of blue hydrogen when the production of hydrogen from natural gas is coupled with a CO 2 separation and storage process (CCS, Carbon Capture and Storage). The final storage of the CO 2 in underground storage sites is intended to prevent the CO 2 from entering the atmosphere. Turquoise hydrogen is also obtained from fossil natural gas through the thermal breakdown of methane (methane pyrolysis). Instead of CO 2, this creates solid carbon that must be permanently bound. In further process steps, gaseous methane or liquid hydrocarbon chains can also be synthesized from green hydrogen with the addition of carbon. These so-called e-fuels can replace fossil fuels in combustion engines. In general, the production of hydrogen and related products on the basis of electricity is referred to as Power-to-X (PtX) technology. Depending on the end product, one speaks of power-to-gas (PtG) or power-to-liquid (PtL). Natural gas H 2 O RE electricity Gray hydrogen Blue hydrogen Turquoise hydrogen Green hydrogen + CO 2 Power-to-Gas Power-to-Liquid Power-to-X Synthetic methane Synthetic fuels End notes 1 Greenpeace Energy, Agora Verkehrswende, climate balance over the entire life cycle of the vehicle. 3 Agora Energie- und Verkehrswende, Transport & Environment, energy demand in German air traffic 426 PJ / 118 TWh in 2017 (BMWi, 2019), thus additional RE electricity demand of 311 TWh to cover with e-fuels (38% efficiency of PtL production ; Federal Environment Agency, 2016). Total renewable electricity generation in Germany 222 TWh in 2017 (EU Energy in Figures, 2019).

10 Photo credits: AdobeStock (guukaa, malp, adrian_ilie825, Fokussiert, natapetrovich) & DUH Climate targets Efficiency Technology Water Sustainability standard Sector coupling Carbon source Industry Infrastructure Power-to-X Scaling Renewable energies Hydrogen E-Fuel defossilization Stand: Federal Office Radolfzell Fritz-Reichle-Ring Radolfzell Tel .: Federal Office Berlin Hackescher Markt Berlin Tel .: Contact person Constantin Zerger Head of Energy & Climate Protection Tel .: Dorothee Saar Head of Traffic & Air Pollution Control Tel .: umwelthilfe We keep you up to date: This is recognized as a non-profit environmental and consumer protection organization. We are independent, have the right to take legal action and have been fighting for the preservation of nature and biodiversity for over 40 years. Please support our work with your donation. Transparent according to the Transparent Civil Society Initiative. Awarded the DZI donation seal for reputable donation organizations. Our donation account: Bank für Sozialwirtschaft Köln IBAN: DE BIC: BFSWDE33XXX