Table.Briefing: Europe

Hydrogen: Germany rebuffed by IPCEI + Interview with Hydrogen Europe CEO+ Unrealistic climate targets

  • Hydrogen: Germany rebuffed by IPCEI
  • Chatzimarkakis: ‘€3 billion can only be the beginning’
  • Report: Net-zero targets overestimate natural CO2 storage potential
  • Nord Stream 1: 250 meters of pipeline damaged
  • Poland decides to build nuclear power plants
  • Denmark: Frederiksen begins exploratory talks
  • Heads: Sameh Hassan Shoukry – COP host without focus on climate
Dear reader,

Germany set its goals high when it came to hydrogen: “We want to become the world’s number one in hydrogen technologies,” said Peter Altmaier, Germany’s Economy Minister at the time, last year. But now it turns out that German industry has a hard time with approvals under the European Hydrogen IPCEI. For a third of the projects applied for, the German government has to look for other funding opportunities. However, the industry does not only see this as a disadvantage, as Manuel Berkel reports.

We’ll stick to the topic: “Elsewhere, they get the job done while we are still talking about it.” – Jorgo Chatzimarkakis, head of the European hydrogen association Hydrogen Europe, delivers a harsh verdict on European policy, which in the field of hydrogen is conspicuous above all for its “paralyzing internal debates”. Manuel Berkel and Markus Grabitz spoke with him about the planned European Hydrogen Bank, the biggest competitors, and investments outside the EU.

Starting today, the foreign ministers of the G7 countries will meet where the Peace of Westphalia was negotiated more than 370 years ago. The two-day meeting in Münster will focus primarily on the consequences of Russia’s war of aggression against Ukraine, but also on how to deal with China and Iran. It was initially unclear whether further sanctions against Russia would be decided in Münster.

Italy’s new prime minister, Giorgia Meloni, has attracted attention in the past for her less-than-subtle criticism of the EU. Her first trip abroad as head of government now takes her to Brussels, of all places. Today she is expected to hold talks with EU Parliament President Roberta Metsola, Commission President Ursula von der Leyen and Council President Charles Michel. This can be seen as a positive signal to the EU, but some people remain skeptical: “She has to explain whether she wants to be a reliable partner,” said the German Greens in the European Parliament in advance.

Your
Sarah Schaefer
Image of Sarah  Schaefer

Feature

Hydrogen: Germany rebuffed by IPCEI

There was great joy in May last year. “We want to become the world’s number 1 in hydrogen technologies,” said Peter Altmaier, then Federal Minister for Economic Affairs and Energy, holding a map in his hand. On it: 62 projects from German industry that the Ministry for Economy and the Ministry of Transport had selected. From more than 230 applications, for €8 billion in government funding and investments totaling €33 billion. A prestige project of the German EU Council Presidency, the approvals were supposed to be available by the end of the year. But the vast majority of companies are still waiting. For some, the frustration became too great.

Two companies have meanwhile withdrawn their funding applications. This emerges from a response from the State Secretary in the Federal Ministry for Economic Affairs, Patrick Graichen, to the CDU Member of the Bundestag Oliver Grundmann, which is available to Europe.Table. For far more enterprises, the prestigious promotion instrument proved as wrong choice.

“At the request of the EU Commission, […] some of the projects prenotified under IPCEI are to be funded under other legal bases (under the EU Climate, Energy and Environmental Aid Guidelines (CEEAG), or the General Block Exemption Regulation GEBR),” Graichen writes. “As things stand, that’s 21 of the original 62 projects.” Of those, 16 came from the Economy Ministry’s portfolio and five from the Transportation Ministry’s. So about a third of the projects, the Commission doesn’t even consider eligible in the original framework.

VCI criticizes IPCEI criteria as too bureaucratic

Grundmann, a CDU member of parliament, understands the frustration of those responsible for the project. “The wait goes on. Lack of clarity and transparency are the opposite of investment and planning security,” criticizes the hydrogen rapporteur of the CDU/CSU parliamentary group. “If 21 of the original 62 German projects no longer meet the IPCEI criteria, we would like to know why. In the current climate and energy crisis, we don’t need more bureaucratic brake blocks but an investment boost!”

The chemical association VCI had already criticized the IPCEI criteria as being too bureaucratic (Europe.Table reported). For example, the industry considers the necessary participation of four member states to be excessive. Smaller companies have an even harder time of it. This funding instrument is almost inaccessible to small and medium-sized companies, according to the current white paper on the hydrogen economy published by the German Association for Electrical, Electronic and Information Technologies (VDE).

The Commission and the German government held each other responsible for the slow processing of the applications. It is an open secret that Brussels thought many applications were poorly prepared. This may also have been due to the high number of applications. However, the ministries and authorities involved also failed to ensure adequate staffing levels, according to one industry reproach. The ministries, on the other hand, were of the opinion that the Commission was too meticulous in its checks.

Other EU countries were more successful. So far, the Commission has notified 76 projects according to the IPCEI criteria in two so-called waves, but only four of these were from Germany. The third wave of important infrastructure projects is expected to be the largest, according to the Berlin coalition, which is hopeful that German projects will again be notified. However, the decisions will probably not be announced within the next few weeks but rather in the first quarter of 2023.

The Commission could then possibly leave it at these three funding waves. At present, it is not certain whether there will also be a fourth wave, as initially considered, according to observers.

CEEAG notifications as an alternative

The hopes of industry then lie in approvals under the Climate, Energy and Environmental Aid Guidelines (CEEAG) or the General Block Exemption Regulation (GBER). Following the CEEAG, the Directorate General for Competition finally approved the first two important projects from the German basic industries at the beginning of October – from steel producer Salzgitter and chemical giant BASF.

The Commission, by its very nature, doesn’t think much of the accusation that it is applying excessive standards. “Not all projects within the hydrogen value chain are intended to be part of an IPCEI,” a Commission spokeswoman said back in September. “For example, decarbonization projects that apply (rather than develop) new technologies and have limited or no cross-border collaboration or spillover effects may be better assessed under the CEEAGs.”

After all, thanks to the CEEAG notifications, subsidies of over one billion euros can now finally be invested. The industry, therefore, does not see the alternative process route as a disadvantage at all, but even feels a bit liberated. “After all, similarly large sums of funding are available here, in some cases even uncapped, which can be checked and handled by the state authorities,” explains Jorgo Chatzimarkakis, CEO of Hydrogen Europe. “So the EU does not need to be involved with this anymore, which eliminates a significant amount of bureaucracy. That’s a huge advantage!”

Projects that were once selected by member states as IPCEI projects but were not awarded the contract would be prioritized by the Commission in the CEEAG notifications, the agency spokeswoman explains. “So it makes perfect sense to have applied and now be referred to a less complex system,” Chatzimarkakis says. Often, he says, member states are not even sufficiently informed about this possibility. For the end of November, Hydrogen Europe is therefore planning a workshop for member companies and representatives of the EU states with the Directorate General for Competition.

  • Energy
  • European policy
  • Hydrogen
  • IPCEI
  • Renewable energies

Chatzimarkakis: ‘€3 billion can only be the beginning’

Jorgo Chatzimarkakis heads the hydrogen association Hydrogen Europe in Brussels.

Mr. Chatzimarkakis, the Commission wants to establish a European Hydrogen Bank. What does that mean?

Beyond the announcement by the Commission President, we know that the share capital is to be €3 billion. The Commission intends to present its proposal for the legal basis for the bank in the third quarter of 2023. In addition, we know that the ten million tons of hydrogen will play a role. Those quantities will be purchased by the Commission to meet the targets of the Renewable Energies Directive (RED 3). There are two targets for hydrogen in this directive: More than five percent of all fuels and half of the hydrogen used in industry must be green. These are huge quantities – a total of around ten million metric tons – that have to be produced every year. The bank is to secure the purchase for this.

How much hydrogen can be produced with the announced €3 billion?

The three billion is nowhere near enough. The German government is already providing €5 billion as part of its H2 Global Initiative to purchase hydrogen globally. So one member state alone provides much more funding than the EU bank is supposed to mobilize. This means that €3 billion can only be the initial capital. I assume that this is the amount available each year. The EU must already mobilize €3 billion every year. Otherwise, it will not achieve its goals, especially since the USA is heavily active. First and foremost, there’s the Inflation Reduction Act. This act offers a much clearer, easier-to-understand funding instrument. I am firmly convinced: Von der Leyen’s bank should be interpreted as a response to the US announcement. A European whammy is intended to put a damper on the US investment suck.

Europe is politically paralyzed

How does Europe, with its €3 billion, compare with other economic areas such as India and China?

The current figures on electrolysis are frightening: China leads the field in terms of electrolysis capacity – in other words, the technology needed to produce hydrogen. Followed by the US, and in third place comes Europe. That’s not good. That doesn’t say that the technology is better in China and the US. But it does say that other areas are more attractive because they are more aggressive and offer clearer support mechanisms. Europe was early with the comprehensive hydrogen strategy in July 2020, but after big announcements, we have fallen behind again due to crippling internal debates. Other players are coming: India has announced $50 billion in private investment. That is delightful but also makes us shudder. We can see that elsewhere, things are getting done. Here, on the other hand, there is still only talk.

Why are the framework conditions clearer elsewhere?

In the USA, I know that I will get $3 per kilogram for clean hydrogen. There, too, criteria have to be met, for example with regard to purity and CO2 emissions. Here in the EU, the only thing on the horizon is the announcement of the hydrogen bank. One wonders, “What are the details?” Shrugs.

Should hydrogen production outside the EU also be promoted?

No, that’s a problem: Under European law, we can’t invest those €3 billion outside the EU. Locations that are highly attractive for wind and solar energy, such as Morocco, Namibia or Egypt, are therefore ruled out. This is where the German H2 Global initiative could come into play, which is deliberately open to global funding. Why isn’t the EU joining H2 Global? There are concerns that Ursula von der Leyen, as a German, would not be able to join forces with the German initiative. This debate is superfluous. We need to apply the best instrument and not ask which member state it comes from.

Money for the bank comes from emissions trading

€3 billion – are we talking about cash or will you have to work with guarantees from the EU budget?

That’s cash. The money comes from the revenues of emissions trading, i.e., from the ETS pot, and must, therefore, not be spent on imported hydrogen. We, therefore, need other instruments. For example, according to an announcement by Commission Vice President Frans Timmermans, there will be contracts for difference as early as November. In addition, we need leverage mechanisms such as those already used very successfully by the European Investment Bank (EIB) since the Juncker Fund via guarantees. These mechanisms are also planned. The whole construct will be called the Hydrogen Bank. It will have elements of a bank, but will also have other pillars, as I have outlined.

Are there already concrete projects?

One concrete example is the production of green hydrogen in Egypt. The government has designated an area for this in a strategically favorable location near the Suez Canal. Hydrogen in the form of ammonia can be transported from there to customers very quickly by ship. The Europeans co-financed this €42 billion deal through the EBRD. But the first customers for green ammonia are now not companies from Europe but from Korea and Japan. We don’t want that. We want hydrogen to go to Europe. The Europeans are hesitant, they lack the EU legal framework for it. Without delegated acts, no long-term contracts. But Egypt wants a long-term contract and is looking for other customers. The Hydrogen Bank could act as an intermediary and step into the breach until legal certainty is there.

Isn’t everything going too slowly? Is Europe losing ground?

Frans Timmermans has just committed that we don’t have to wait until the third quarter of 2023. He wants speed. That’s all well and good. But one thing is also certain: The two-year dispute over the Delegated Act on additionality shows very clearly that Europe has a problem. The crazy, completely nonsensical ideological dispute within a Directorate General of the Commission about the definition of green hydrogen has set us back massively and is still paralyzing us today. We need to pick up the pace, everything else costs us jobs.

  • Climate & Environment
  • Energy
  • Green Deal
  • Hydrogen

Events

Nov. 04, 2022; 10 a.m.-1 p.m., Brussels (Belgium)/online
EESC, Conference REPowering our EU
The European Economic and Social Committee (EESC) conference will focus on chances and developments of renewable energies and on how to achieve the REPowerEU targets through an energy shift. INFORMATION

Nov. 07, 2022; 6:30-9 p.m., Brussels (Belgium)
KAS, Panel Discussion Reinventing EU economic governance – What will become of the Stability and Growth Pact?
Konrad Adenauer Foundation (KAS) guests will discuss the question of what a reform of the Stability and Growth Pact might entail. INFORMATION

News

Report: Net-zero targets overestimate natural CO2 storage potential

Countries’ promises of climate neutrality are based on unrealistic amounts of land-based carbon storage. That’s the conclusion of the authors of the first “Land Gap Report“, to be released Thursday. The total land area required for the planned biological storage of carbon, according to reports by UN member states, is just under 1.2 billion hectares, according to the report’s pre-release summary. An area larger than that of the US (983 million hectares) and about the size of the arable land currently in use globally.

The authors’ critique: Climate neutrality pledges by countries are geared toward a net-zero target, often based on CO2 storage through biomass rather than avoidance of CO2 emissions. Natural CO2 removals would thus be used to offset a “theoretically equivalent amount of fossil fuel emissions in national greenhouse gas inventories”. This risks undermining CO2 mitigation measures.

The EU also has a climate neutrality target by 2050, relying heavily on natural carbon sinks in the LULUCF sectors (Europe.Table reported).

New trees do not provide sufficient compensation

In particular, the authors call on legislators worldwide to more clearly regulate the accounting of emissions reductions and removals. Currently, emissions from fossil fuel use, industrial agriculture, and timber harvesting are offset in these programs by forest regrowth alone. Planting new trees cannot compensate for the loss of existing primary forests.

“Cutting down mature trees with the expectation that they will grow back results in a decades-long carbon debt by permanently reducing the carbon stored in the landscape and increasing the stock in the atmosphere,” the authors write. Accordingly, the balance sheets on the path to climate neutrality would need to include “clearer and more accurate information on the actual impacts of the various mitigation measures”.

The researchers call for greater consideration to be given to the land rights of indigenous peoples. These are endangered by land use plans for natural CO2 storage, they say. In any case, it has been proven that indigenous peoples with secure land rights are far ahead of both state and private landowners in avoiding deforestation as well as sustainable food production.

The Land Gap Report was prepared by researchers, including from the Universities of Melbourne, Lund and Copenhagen, as well as the Center for International Forestry Research and the Third World Network. luk

  • Climate & Environment
  • Climate Policy
  • Emissions

Nord Stream 1: 250 meters of pipeline damaged

According to the operating company, 250 meters of the Nord Stream 1 Baltic Sea gas pipeline have been damaged. According to preliminary investigation results, there are two craters on the seabed, each three to five meters deep, Nord Stream AG announced on Wednesday. They are located about 248 meters apart. The intervening section of Line 1 of the double strand has been destroyed. Pipe fragments are scattered at least within a radius of 250 meters, it said.

According to Nord Stream AG, the announcement was preceded by initial investigations of Line 1 in the Swedish Exclusive Economic Zone (EEZ).

At the end of September, following explosions near the Baltic Sea island of Bornholm, four leaks were discovered on the Nord Stream 1 and 2 gas pipelines, two each in the exclusive economic zones of Denmark and Sweden. The EU and NATO, among others, assume that sabotage was involved. Both double strands run from Russia to Lubmin in northeastern Germany.

Last week, Nord Stream AG announced investigations in the Swedish EEZ. According to the report, permits from the authorities were missing for the assessment of the damage in the Danish EEZ. dpa

  • Denmark
  • Energy
  • Natural gas
  • North Stream 1

Poland decides to build nuclear power plants

The Polish government passed a resolution to build the country’s first nuclear power plants. The contract for the first site was awarded to the US Westinghouse Electric Company, the PAP news agency reported Wednesday after a cabinet meeting in Warsaw. The basis is a 2020 cooperation agreement between Washington and Warsaw on the civilian use of nuclear power.

“We clearly see that we need to rely not only on proven technology but also on proven partners,” said Mateusz Morawiecki, the national conservative head of government. The preferred nuclear power plant site, Lubiatowo-Kopalino, is located on the Baltic Sea coast in the Pomeranian Voivodeship northwest of Gdańsk. Three AP 1000 pressurized water reactors are planned.

A second nuclear power plant site is also planned. “This is a project concerning the construction of a nuclear power plant in Poland by a Korean company with the participation of Polish companies,” Morawiecki explained. There is no further information yet on a possible third project in central Poland. France had also expressed interest in the contracts.

The first Polish nuclear reactor is scheduled to go online in 2033. In the 1980s, construction of a Soviet-designed nuclear power plant had begun near Gdańsk. The Żarnowiec NPP was never completed after protests. Currently, coal-fired power plants cover about 70 percent of Poland’s electricity needs. dpa

  • Energy
  • Energy policy
  • Nuclear power
  • Poland

Denmark: Frederiksen begins exploratory talks

Denmark’s resigned Prime Minister Mette Frederiksen has been given the task of exploring ways to form a new government. She will initiate the negotiations on Friday and invite all parties as well as representatives from Greenland and the Faroe Islands to her official residence in Marienborg, north of Copenhagen, the 44-year-old Social Democrat told TV2 on Wednesday. There she will listen to the wishes and priorities of all parties.

Although the left-leaning camp around her Social Democrats won a razor-thin majority at the last minute in Tuesday’s Danish parliamentary election, Frederiksen submitted her government’s resignation to Queen Margrethe II on Wednesday.

Frederiksen no longer wants to lead Denmark in the future with a purely Social Democratic minority government, as has been the case in the past but is striving for broad government cooperation across the political center. Whether this will succeed is still unclear. dpa

  • Democracy
  • Denmark
  • Society

Heads

Sameh Hassan Shoukry – COP host without focus on climate

Sameh Hassan Shoukry is Egypt’s Foreign Minister and host of COP 27.

Just over a week before the start of the UN Climate Change Conference in the Egyptian resort of Sharm el-Sheihk, Sameh Hassan Shoukry takes a tour of the conference grounds. Press photos show the 70-year-old talking to workers. He wears a short-sleeved gray polo shirt, his left hand in his pants pocket, while he gestures with his right. He seems approachable, interested, open-minded. Like an architect visiting his construction site. “The Egyptian COP-27 presidency is ready to receive the global climate community in Sharm El Sheikh in November,” is his message following this visit.

The expectations resting on him these days are high. The slogan of the COP is “together for implementation”. But rarely have the circumstances been as bad for global cooperation against the climate crisis as they are today. Russia’s war against Ukraine, energy price inflation, food crisis, high post-pandemic debt and tensions between the US and China make joint and decisive action against climate threats difficult.

Little presence on climate issues so far

Before his appointment as COP president earlier this year, Shoukry had not been involved with climate issues. “Shoukry is a career diplomat with decades of experience,” says Lutz Weischer of Germanwatch. That’s not the worst possible prerequisite, though, he thinks.

The task of a COP president, he said, is to create a good negotiating atmosphere and facilitate compromises but also to ensure that the lowest common denominator is not all that remains at the end. The experience of decades in the service of diplomacy can certainly be helpful here.

In the run-up to the climate conference, Shoukry is not sparing in his criticism of the industrialized countries, which have so far failed to meet their financial pledges for climate protection measures in developing countries. He has made adaptation to the effects of climate change his priority.

“This criticism is entirely justified,” says Lutz Weischer. But to be a successful COP president, he says, the focus should not be solely on the issues of adaptation to climate change and reparation for loss and damage. “Shoukry must be even more explicit about climate policy ambitions and formulate ambitious emission reduction targets,” says Weischer.

In the service of diplomacy for four decades

A year after graduating with a degree in law from Ain Shams University in Cairo, Shoukry began his career as an attaché to the Ministry of Foreign Affairs in Cairo in 1976. After posts in London, Buenos Aires and Vienna, he was Egypt’s permanent representative to the United Nations in Geneva from 2005 to 2008. Finally, in 2008, he becomes Egypt’s ambassador to the United States.

While in his homeland, the Arab Spring swept then-President Hosni Mubarak from office in 2011, Shoukry remained in Washington until 2012. “During the 2011 uprising, Shoukry was the epitome of calm, pragmatic thinking that supported demands for democracy. In the same breath, however, he advocated for the military’s involvement in politics to prevent chaos,” according to an article on Shoukry in “The Africa Report”.

“However, his pragmatic nature and calm diplomatic approach did not help him win a seat in the short-lived post-Mubarak government of Mohammed Mursi,” it adds. Finally, in 2014, Abdel Fattah el-Sisi brought the experienced diplomat Shoukry into the Egyptian government as foreign minister after coming to power.

Little is known about Shoukry’s private life. According to press reports, his wife, Suzy Shoukry, is also active in diplomatic and charitable circles. Together they have two sons.

Shoukry does not have to manage COP 27 alone. In his demanding task, he can rely on the experience of Environment Minister Yasmine Fouad, who is assisting him as Ministerial Coordinator and Envoy. She has more than 18 years of experience in the fields of environment and international cooperation. Ulrike Christl

  • Climate & Environment
  • Climate protection
  • Egypt

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

Licenses:
    • Hydrogen: Germany rebuffed by IPCEI
    • Chatzimarkakis: ‘€3 billion can only be the beginning’
    • Report: Net-zero targets overestimate natural CO2 storage potential
    • Nord Stream 1: 250 meters of pipeline damaged
    • Poland decides to build nuclear power plants
    • Denmark: Frederiksen begins exploratory talks
    • Heads: Sameh Hassan Shoukry – COP host without focus on climate
    Dear reader,

    Germany set its goals high when it came to hydrogen: “We want to become the world’s number one in hydrogen technologies,” said Peter Altmaier, Germany’s Economy Minister at the time, last year. But now it turns out that German industry has a hard time with approvals under the European Hydrogen IPCEI. For a third of the projects applied for, the German government has to look for other funding opportunities. However, the industry does not only see this as a disadvantage, as Manuel Berkel reports.

    We’ll stick to the topic: “Elsewhere, they get the job done while we are still talking about it.” – Jorgo Chatzimarkakis, head of the European hydrogen association Hydrogen Europe, delivers a harsh verdict on European policy, which in the field of hydrogen is conspicuous above all for its “paralyzing internal debates”. Manuel Berkel and Markus Grabitz spoke with him about the planned European Hydrogen Bank, the biggest competitors, and investments outside the EU.

    Starting today, the foreign ministers of the G7 countries will meet where the Peace of Westphalia was negotiated more than 370 years ago. The two-day meeting in Münster will focus primarily on the consequences of Russia’s war of aggression against Ukraine, but also on how to deal with China and Iran. It was initially unclear whether further sanctions against Russia would be decided in Münster.

    Italy’s new prime minister, Giorgia Meloni, has attracted attention in the past for her less-than-subtle criticism of the EU. Her first trip abroad as head of government now takes her to Brussels, of all places. Today she is expected to hold talks with EU Parliament President Roberta Metsola, Commission President Ursula von der Leyen and Council President Charles Michel. This can be seen as a positive signal to the EU, but some people remain skeptical: “She has to explain whether she wants to be a reliable partner,” said the German Greens in the European Parliament in advance.

    Your
    Sarah Schaefer
    Image of Sarah  Schaefer

    Feature

    Hydrogen: Germany rebuffed by IPCEI

    There was great joy in May last year. “We want to become the world’s number 1 in hydrogen technologies,” said Peter Altmaier, then Federal Minister for Economic Affairs and Energy, holding a map in his hand. On it: 62 projects from German industry that the Ministry for Economy and the Ministry of Transport had selected. From more than 230 applications, for €8 billion in government funding and investments totaling €33 billion. A prestige project of the German EU Council Presidency, the approvals were supposed to be available by the end of the year. But the vast majority of companies are still waiting. For some, the frustration became too great.

    Two companies have meanwhile withdrawn their funding applications. This emerges from a response from the State Secretary in the Federal Ministry for Economic Affairs, Patrick Graichen, to the CDU Member of the Bundestag Oliver Grundmann, which is available to Europe.Table. For far more enterprises, the prestigious promotion instrument proved as wrong choice.

    “At the request of the EU Commission, […] some of the projects prenotified under IPCEI are to be funded under other legal bases (under the EU Climate, Energy and Environmental Aid Guidelines (CEEAG), or the General Block Exemption Regulation GEBR),” Graichen writes. “As things stand, that’s 21 of the original 62 projects.” Of those, 16 came from the Economy Ministry’s portfolio and five from the Transportation Ministry’s. So about a third of the projects, the Commission doesn’t even consider eligible in the original framework.

    VCI criticizes IPCEI criteria as too bureaucratic

    Grundmann, a CDU member of parliament, understands the frustration of those responsible for the project. “The wait goes on. Lack of clarity and transparency are the opposite of investment and planning security,” criticizes the hydrogen rapporteur of the CDU/CSU parliamentary group. “If 21 of the original 62 German projects no longer meet the IPCEI criteria, we would like to know why. In the current climate and energy crisis, we don’t need more bureaucratic brake blocks but an investment boost!”

    The chemical association VCI had already criticized the IPCEI criteria as being too bureaucratic (Europe.Table reported). For example, the industry considers the necessary participation of four member states to be excessive. Smaller companies have an even harder time of it. This funding instrument is almost inaccessible to small and medium-sized companies, according to the current white paper on the hydrogen economy published by the German Association for Electrical, Electronic and Information Technologies (VDE).

    The Commission and the German government held each other responsible for the slow processing of the applications. It is an open secret that Brussels thought many applications were poorly prepared. This may also have been due to the high number of applications. However, the ministries and authorities involved also failed to ensure adequate staffing levels, according to one industry reproach. The ministries, on the other hand, were of the opinion that the Commission was too meticulous in its checks.

    Other EU countries were more successful. So far, the Commission has notified 76 projects according to the IPCEI criteria in two so-called waves, but only four of these were from Germany. The third wave of important infrastructure projects is expected to be the largest, according to the Berlin coalition, which is hopeful that German projects will again be notified. However, the decisions will probably not be announced within the next few weeks but rather in the first quarter of 2023.

    The Commission could then possibly leave it at these three funding waves. At present, it is not certain whether there will also be a fourth wave, as initially considered, according to observers.

    CEEAG notifications as an alternative

    The hopes of industry then lie in approvals under the Climate, Energy and Environmental Aid Guidelines (CEEAG) or the General Block Exemption Regulation (GBER). Following the CEEAG, the Directorate General for Competition finally approved the first two important projects from the German basic industries at the beginning of October – from steel producer Salzgitter and chemical giant BASF.

    The Commission, by its very nature, doesn’t think much of the accusation that it is applying excessive standards. “Not all projects within the hydrogen value chain are intended to be part of an IPCEI,” a Commission spokeswoman said back in September. “For example, decarbonization projects that apply (rather than develop) new technologies and have limited or no cross-border collaboration or spillover effects may be better assessed under the CEEAGs.”

    After all, thanks to the CEEAG notifications, subsidies of over one billion euros can now finally be invested. The industry, therefore, does not see the alternative process route as a disadvantage at all, but even feels a bit liberated. “After all, similarly large sums of funding are available here, in some cases even uncapped, which can be checked and handled by the state authorities,” explains Jorgo Chatzimarkakis, CEO of Hydrogen Europe. “So the EU does not need to be involved with this anymore, which eliminates a significant amount of bureaucracy. That’s a huge advantage!”

    Projects that were once selected by member states as IPCEI projects but were not awarded the contract would be prioritized by the Commission in the CEEAG notifications, the agency spokeswoman explains. “So it makes perfect sense to have applied and now be referred to a less complex system,” Chatzimarkakis says. Often, he says, member states are not even sufficiently informed about this possibility. For the end of November, Hydrogen Europe is therefore planning a workshop for member companies and representatives of the EU states with the Directorate General for Competition.

    • Energy
    • European policy
    • Hydrogen
    • IPCEI
    • Renewable energies

    Chatzimarkakis: ‘€3 billion can only be the beginning’

    Jorgo Chatzimarkakis heads the hydrogen association Hydrogen Europe in Brussels.

    Mr. Chatzimarkakis, the Commission wants to establish a European Hydrogen Bank. What does that mean?

    Beyond the announcement by the Commission President, we know that the share capital is to be €3 billion. The Commission intends to present its proposal for the legal basis for the bank in the third quarter of 2023. In addition, we know that the ten million tons of hydrogen will play a role. Those quantities will be purchased by the Commission to meet the targets of the Renewable Energies Directive (RED 3). There are two targets for hydrogen in this directive: More than five percent of all fuels and half of the hydrogen used in industry must be green. These are huge quantities – a total of around ten million metric tons – that have to be produced every year. The bank is to secure the purchase for this.

    How much hydrogen can be produced with the announced €3 billion?

    The three billion is nowhere near enough. The German government is already providing €5 billion as part of its H2 Global Initiative to purchase hydrogen globally. So one member state alone provides much more funding than the EU bank is supposed to mobilize. This means that €3 billion can only be the initial capital. I assume that this is the amount available each year. The EU must already mobilize €3 billion every year. Otherwise, it will not achieve its goals, especially since the USA is heavily active. First and foremost, there’s the Inflation Reduction Act. This act offers a much clearer, easier-to-understand funding instrument. I am firmly convinced: Von der Leyen’s bank should be interpreted as a response to the US announcement. A European whammy is intended to put a damper on the US investment suck.

    Europe is politically paralyzed

    How does Europe, with its €3 billion, compare with other economic areas such as India and China?

    The current figures on electrolysis are frightening: China leads the field in terms of electrolysis capacity – in other words, the technology needed to produce hydrogen. Followed by the US, and in third place comes Europe. That’s not good. That doesn’t say that the technology is better in China and the US. But it does say that other areas are more attractive because they are more aggressive and offer clearer support mechanisms. Europe was early with the comprehensive hydrogen strategy in July 2020, but after big announcements, we have fallen behind again due to crippling internal debates. Other players are coming: India has announced $50 billion in private investment. That is delightful but also makes us shudder. We can see that elsewhere, things are getting done. Here, on the other hand, there is still only talk.

    Why are the framework conditions clearer elsewhere?

    In the USA, I know that I will get $3 per kilogram for clean hydrogen. There, too, criteria have to be met, for example with regard to purity and CO2 emissions. Here in the EU, the only thing on the horizon is the announcement of the hydrogen bank. One wonders, “What are the details?” Shrugs.

    Should hydrogen production outside the EU also be promoted?

    No, that’s a problem: Under European law, we can’t invest those €3 billion outside the EU. Locations that are highly attractive for wind and solar energy, such as Morocco, Namibia or Egypt, are therefore ruled out. This is where the German H2 Global initiative could come into play, which is deliberately open to global funding. Why isn’t the EU joining H2 Global? There are concerns that Ursula von der Leyen, as a German, would not be able to join forces with the German initiative. This debate is superfluous. We need to apply the best instrument and not ask which member state it comes from.

    Money for the bank comes from emissions trading

    €3 billion – are we talking about cash or will you have to work with guarantees from the EU budget?

    That’s cash. The money comes from the revenues of emissions trading, i.e., from the ETS pot, and must, therefore, not be spent on imported hydrogen. We, therefore, need other instruments. For example, according to an announcement by Commission Vice President Frans Timmermans, there will be contracts for difference as early as November. In addition, we need leverage mechanisms such as those already used very successfully by the European Investment Bank (EIB) since the Juncker Fund via guarantees. These mechanisms are also planned. The whole construct will be called the Hydrogen Bank. It will have elements of a bank, but will also have other pillars, as I have outlined.

    Are there already concrete projects?

    One concrete example is the production of green hydrogen in Egypt. The government has designated an area for this in a strategically favorable location near the Suez Canal. Hydrogen in the form of ammonia can be transported from there to customers very quickly by ship. The Europeans co-financed this €42 billion deal through the EBRD. But the first customers for green ammonia are now not companies from Europe but from Korea and Japan. We don’t want that. We want hydrogen to go to Europe. The Europeans are hesitant, they lack the EU legal framework for it. Without delegated acts, no long-term contracts. But Egypt wants a long-term contract and is looking for other customers. The Hydrogen Bank could act as an intermediary and step into the breach until legal certainty is there.

    Isn’t everything going too slowly? Is Europe losing ground?

    Frans Timmermans has just committed that we don’t have to wait until the third quarter of 2023. He wants speed. That’s all well and good. But one thing is also certain: The two-year dispute over the Delegated Act on additionality shows very clearly that Europe has a problem. The crazy, completely nonsensical ideological dispute within a Directorate General of the Commission about the definition of green hydrogen has set us back massively and is still paralyzing us today. We need to pick up the pace, everything else costs us jobs.

    • Climate & Environment
    • Energy
    • Green Deal
    • Hydrogen

    Events

    Nov. 04, 2022; 10 a.m.-1 p.m., Brussels (Belgium)/online
    EESC, Conference REPowering our EU
    The European Economic and Social Committee (EESC) conference will focus on chances and developments of renewable energies and on how to achieve the REPowerEU targets through an energy shift. INFORMATION

    Nov. 07, 2022; 6:30-9 p.m., Brussels (Belgium)
    KAS, Panel Discussion Reinventing EU economic governance – What will become of the Stability and Growth Pact?
    Konrad Adenauer Foundation (KAS) guests will discuss the question of what a reform of the Stability and Growth Pact might entail. INFORMATION

    News

    Report: Net-zero targets overestimate natural CO2 storage potential

    Countries’ promises of climate neutrality are based on unrealistic amounts of land-based carbon storage. That’s the conclusion of the authors of the first “Land Gap Report“, to be released Thursday. The total land area required for the planned biological storage of carbon, according to reports by UN member states, is just under 1.2 billion hectares, according to the report’s pre-release summary. An area larger than that of the US (983 million hectares) and about the size of the arable land currently in use globally.

    The authors’ critique: Climate neutrality pledges by countries are geared toward a net-zero target, often based on CO2 storage through biomass rather than avoidance of CO2 emissions. Natural CO2 removals would thus be used to offset a “theoretically equivalent amount of fossil fuel emissions in national greenhouse gas inventories”. This risks undermining CO2 mitigation measures.

    The EU also has a climate neutrality target by 2050, relying heavily on natural carbon sinks in the LULUCF sectors (Europe.Table reported).

    New trees do not provide sufficient compensation

    In particular, the authors call on legislators worldwide to more clearly regulate the accounting of emissions reductions and removals. Currently, emissions from fossil fuel use, industrial agriculture, and timber harvesting are offset in these programs by forest regrowth alone. Planting new trees cannot compensate for the loss of existing primary forests.

    “Cutting down mature trees with the expectation that they will grow back results in a decades-long carbon debt by permanently reducing the carbon stored in the landscape and increasing the stock in the atmosphere,” the authors write. Accordingly, the balance sheets on the path to climate neutrality would need to include “clearer and more accurate information on the actual impacts of the various mitigation measures”.

    The researchers call for greater consideration to be given to the land rights of indigenous peoples. These are endangered by land use plans for natural CO2 storage, they say. In any case, it has been proven that indigenous peoples with secure land rights are far ahead of both state and private landowners in avoiding deforestation as well as sustainable food production.

    The Land Gap Report was prepared by researchers, including from the Universities of Melbourne, Lund and Copenhagen, as well as the Center for International Forestry Research and the Third World Network. luk

    • Climate & Environment
    • Climate Policy
    • Emissions

    Nord Stream 1: 250 meters of pipeline damaged

    According to the operating company, 250 meters of the Nord Stream 1 Baltic Sea gas pipeline have been damaged. According to preliminary investigation results, there are two craters on the seabed, each three to five meters deep, Nord Stream AG announced on Wednesday. They are located about 248 meters apart. The intervening section of Line 1 of the double strand has been destroyed. Pipe fragments are scattered at least within a radius of 250 meters, it said.

    According to Nord Stream AG, the announcement was preceded by initial investigations of Line 1 in the Swedish Exclusive Economic Zone (EEZ).

    At the end of September, following explosions near the Baltic Sea island of Bornholm, four leaks were discovered on the Nord Stream 1 and 2 gas pipelines, two each in the exclusive economic zones of Denmark and Sweden. The EU and NATO, among others, assume that sabotage was involved. Both double strands run from Russia to Lubmin in northeastern Germany.

    Last week, Nord Stream AG announced investigations in the Swedish EEZ. According to the report, permits from the authorities were missing for the assessment of the damage in the Danish EEZ. dpa

    • Denmark
    • Energy
    • Natural gas
    • North Stream 1

    Poland decides to build nuclear power plants

    The Polish government passed a resolution to build the country’s first nuclear power plants. The contract for the first site was awarded to the US Westinghouse Electric Company, the PAP news agency reported Wednesday after a cabinet meeting in Warsaw. The basis is a 2020 cooperation agreement between Washington and Warsaw on the civilian use of nuclear power.

    “We clearly see that we need to rely not only on proven technology but also on proven partners,” said Mateusz Morawiecki, the national conservative head of government. The preferred nuclear power plant site, Lubiatowo-Kopalino, is located on the Baltic Sea coast in the Pomeranian Voivodeship northwest of Gdańsk. Three AP 1000 pressurized water reactors are planned.

    A second nuclear power plant site is also planned. “This is a project concerning the construction of a nuclear power plant in Poland by a Korean company with the participation of Polish companies,” Morawiecki explained. There is no further information yet on a possible third project in central Poland. France had also expressed interest in the contracts.

    The first Polish nuclear reactor is scheduled to go online in 2033. In the 1980s, construction of a Soviet-designed nuclear power plant had begun near Gdańsk. The Żarnowiec NPP was never completed after protests. Currently, coal-fired power plants cover about 70 percent of Poland’s electricity needs. dpa

    • Energy
    • Energy policy
    • Nuclear power
    • Poland

    Denmark: Frederiksen begins exploratory talks

    Denmark’s resigned Prime Minister Mette Frederiksen has been given the task of exploring ways to form a new government. She will initiate the negotiations on Friday and invite all parties as well as representatives from Greenland and the Faroe Islands to her official residence in Marienborg, north of Copenhagen, the 44-year-old Social Democrat told TV2 on Wednesday. There she will listen to the wishes and priorities of all parties.

    Although the left-leaning camp around her Social Democrats won a razor-thin majority at the last minute in Tuesday’s Danish parliamentary election, Frederiksen submitted her government’s resignation to Queen Margrethe II on Wednesday.

    Frederiksen no longer wants to lead Denmark in the future with a purely Social Democratic minority government, as has been the case in the past but is striving for broad government cooperation across the political center. Whether this will succeed is still unclear. dpa

    • Democracy
    • Denmark
    • Society

    Heads

    Sameh Hassan Shoukry – COP host without focus on climate

    Sameh Hassan Shoukry is Egypt’s Foreign Minister and host of COP 27.

    Just over a week before the start of the UN Climate Change Conference in the Egyptian resort of Sharm el-Sheihk, Sameh Hassan Shoukry takes a tour of the conference grounds. Press photos show the 70-year-old talking to workers. He wears a short-sleeved gray polo shirt, his left hand in his pants pocket, while he gestures with his right. He seems approachable, interested, open-minded. Like an architect visiting his construction site. “The Egyptian COP-27 presidency is ready to receive the global climate community in Sharm El Sheikh in November,” is his message following this visit.

    The expectations resting on him these days are high. The slogan of the COP is “together for implementation”. But rarely have the circumstances been as bad for global cooperation against the climate crisis as they are today. Russia’s war against Ukraine, energy price inflation, food crisis, high post-pandemic debt and tensions between the US and China make joint and decisive action against climate threats difficult.

    Little presence on climate issues so far

    Before his appointment as COP president earlier this year, Shoukry had not been involved with climate issues. “Shoukry is a career diplomat with decades of experience,” says Lutz Weischer of Germanwatch. That’s not the worst possible prerequisite, though, he thinks.

    The task of a COP president, he said, is to create a good negotiating atmosphere and facilitate compromises but also to ensure that the lowest common denominator is not all that remains at the end. The experience of decades in the service of diplomacy can certainly be helpful here.

    In the run-up to the climate conference, Shoukry is not sparing in his criticism of the industrialized countries, which have so far failed to meet their financial pledges for climate protection measures in developing countries. He has made adaptation to the effects of climate change his priority.

    “This criticism is entirely justified,” says Lutz Weischer. But to be a successful COP president, he says, the focus should not be solely on the issues of adaptation to climate change and reparation for loss and damage. “Shoukry must be even more explicit about climate policy ambitions and formulate ambitious emission reduction targets,” says Weischer.

    In the service of diplomacy for four decades

    A year after graduating with a degree in law from Ain Shams University in Cairo, Shoukry began his career as an attaché to the Ministry of Foreign Affairs in Cairo in 1976. After posts in London, Buenos Aires and Vienna, he was Egypt’s permanent representative to the United Nations in Geneva from 2005 to 2008. Finally, in 2008, he becomes Egypt’s ambassador to the United States.

    While in his homeland, the Arab Spring swept then-President Hosni Mubarak from office in 2011, Shoukry remained in Washington until 2012. “During the 2011 uprising, Shoukry was the epitome of calm, pragmatic thinking that supported demands for democracy. In the same breath, however, he advocated for the military’s involvement in politics to prevent chaos,” according to an article on Shoukry in “The Africa Report”.

    “However, his pragmatic nature and calm diplomatic approach did not help him win a seat in the short-lived post-Mubarak government of Mohammed Mursi,” it adds. Finally, in 2014, Abdel Fattah el-Sisi brought the experienced diplomat Shoukry into the Egyptian government as foreign minister after coming to power.

    Little is known about Shoukry’s private life. According to press reports, his wife, Suzy Shoukry, is also active in diplomatic and charitable circles. Together they have two sons.

    Shoukry does not have to manage COP 27 alone. In his demanding task, he can rely on the experience of Environment Minister Yasmine Fouad, who is assisting him as Ministerial Coordinator and Envoy. She has more than 18 years of experience in the fields of environment and international cooperation. Ulrike Christl

    • Climate & Environment
    • Climate protection
    • Egypt

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    EUROPE.TABLE EDITORS

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