German cabinet approves carbon capture and hydrogen plans

Germany has restricted the use of carbon capture, but Berlin is reconsidering, as it estimates that between 34 million and 73 million tons oc CO2 will need to be captured per year by 2045. Germany’s cabinet approved on Wednesday (29 May) two draft bills to accelerate the integration of hydrogen and carbon capture respectively, into the country’s energy and industrial systems.

The government has identified both technologies as critical components of the country’s drive to become carbon neutral by 2045, while maintaining heavy industries, government sources said.

Carbon capture and storage
Carbon capture and storage, or CCS, removes from the atmosphere carbon dioxide produced by industrial processes or captures it at the point of emission and stores it underground. In Germany, its use has been restricted, but as Europe’s largest CO2 polluter is likely to miss its climate goals, Berlin has reconsidered, estimating the need to capture between 34 million and 73 million tons per year by 2045. Carbon intensive industries which cannot be electrified, apart from coal-fired power plants, will be able to use the technology, according to the new bill, which will also create a legal framework to develop a CO2 pipeline infrastructure.

Companies will be allowed to store CO2 in the bed of the North Sea or inland if the federal states allow it on their territory. Geologically, Germany has around 1.5 billion to 8.3 billion tons of CO2 storage capacity under its part of the North Sea and could deposit up to 20 million tons annually. Under the plans, CO2 exports will be allowed but Berlin will need to ratify a clause in the London Protocol international treaty on cross-border waste exports.

The Hydrogen Acceleration Law will fast-track the construction of hydrogen infrastructure, import and production facilities. It will also give infrastructure an “overriding public interest” status, meaning authorities will prioritize it in the approval process. Permitting procedures will be simplified and digitised and legal cases challenging hydrogen projects and environmental impact assessments will be shortened, according to the planned law, in the hope of a quick expansion of the fuel.

Germany wants to expand reliance on hydrogen as a future energy source to cut greenhouse gas emissions for highly polluting industrial sectors that cannot be electrified such as steel and chemicals and cut dependency on imported fossil fuel. The acceleration will primarily benefit electrolysers, the devices that use energy to separate hydrogen from water, provided they can prove that they will use at least 80 percent renewable energy in the period up to the end of 2029.

Last month, Germany’s ruling coalition agreed to a financing mechanism for the country’s future hydrogen network and offering protection for investors in case of bankruptcies. In March, the government said it would earmark up to €3.53 billin of public funds to procure green hydrogen and its derivatives between 2027 and 2036.

The bill does not include faster construction of new natural gas power plants that will be converted to hydrogen in the future, a key demand of the energy industry.