The European Commission approved on June 21 the EU state aid regulations, Oilprice.com said.
Accordingly, the European Commission approved Germany's plan to support the construction of the hydrogen core network (HCN). The network is expected to be the backbone of long-distance hydrogen pipeline pipelines in Germany. The network is also part of the European hydrogen backbone connecting several EU member states.
The German state budget was set up to contribute to achieving the goals of the EU Hydro Strategy and the "Fit for 55" package by licensing the necessary hydrogen transport infrastructure to promote the use of renewable hydrogen in industry and transport by 2030, according to the European Commission.
This investment includes reusing existing gas pipelines to transport hydrogen as well as building new pipelines and hydrogen compression stations.
The construction and operation of Germany's hydrogen core network will be funded by hydrogen transmission system operators (TSO) and selected by the German federal grid Bundesnetzagentur. This aid will be in the form of a state guarantee, allowing TSOs to access more preferential loans to compensate for initial losses in the development phase of the hydrogen core network.
The network's first main gas pipeline is expected to be operational in 2025, and the entire hydrogen core network is expected to be completed by 2032.
Germany is betting on hydrogen to decarb the economy. Earlier this year, the state-owned German company SEFE said it planned to invest about $534 million to reuse some of its underground gas storage facilities and pipelines into infrastructure suitable for green hydrogen storage and transportation.
In December last year, Norway's SEFE and Equinor signed an energy contract worth an estimated $54 billion (EU50 billion). The deal also includes a non-binding Protocol stating that SEFE is likely to receive a large-scale source of low-carbon hydrogen from Equinor starting in 2029 and continuing until 2060.
According to Reuters, Germany's ruling coalition agreed in April this year on a financial mechanism and extended the deadline for building the hydrogen core network (HCN) pipeline system by 5 years to 2037, while providing protection for investors in case of bankruptcy.
Many countries are moving towards hydrogen - an energy source that can be generated from wind and solar energy to become a more easily stored form of green energy - to achieve zero greenhouse gas emissions.
Hydropower is considered by many to be the only feasible source of carbon-free energy for many processes in the heavy industry, including steel, chemicals, oil refining, glass and ceramics.
Germany is targeting more than 9,700 km of a hydrogen pipeline, with the existing gas transmission system accounting for 60% of the network, to provide energy for heavy industrial parks that cannot switch to electricity.
Green hydropower is produced by separating water molecules through electrolytes using renewable energy and Germany's gas pipeline network will need to connect northern wind power areas with southern industrial centers.
