Europe’s largest economy had banked on Norway as its first large-scale supplier of the gas as other pipeline projects with Spain, Portugal and Denmark are expected to take longer. — Bloomberg
BERLIN: A top German government official criticised Norway for giving up on a bilateral hydrogen pipeline project that was key for cleaning up the nation’s dirty industries.
“Of course I’m concerned about this,” Philipp Steinberg, a department head at the economy ministry, said at a Handelsblatt conference in Berlin on Tuesday.
Last month’s suspension of the link by Equinor ASA – which had planned the project together with partner RWE AG – is a “problem” because Germany wanted to source around one million tonnes of blue hydrogen from 2030 onwards, he said.
Europe’s largest economy had banked on Norway as its first large-scale supplier of the gas as other pipeline projects with Spain, Portugal and Denmark are expected to take longer.
With Germany’s capacity to produce hydrogen limited, the nation aims to import about 70% of its demand – up to 130 terawatt-hours – by the end of the decade.
In order to secure off-take, the government has already advanced plans for a core hydrogen grid and set up billions in subsidy schemes.
In terms of regulating this new market, Germany is the most advanced country in western Europe, according to the S&P Utilities Handbook.
However, few projects have seen a final commitment due to the financial risks around hydrogen.
Steinberg conceded that projects have to be economically worthwhile in the long term, but pointed to the fact that the European nations have all signed the Paris Climate Agreement.
“It worries me a little, that many countries seem to be positioning themselves in such a way that they say, that’s totally great with the energy transition and hydrogen, and then Germany gets to pay for it,” he said.
“But we probably won’t be able to take the risks away from the whole of Europe.” — Bloomberg
