Germany's Hydrogen Switch Is Driven by the Energy Crisis

After Russian gas exports to Germany ceased in June, Kelheim Fibers began searching for alternatives.

Beginning in mid-January, the Bavarian firm, whose fibers are used in tea bags and tampons, will be able to use heating oil instead of gas.

This will increase carbon emissions, thus the corporation is exploring a switch to hydrogen, a cleaner energy source if produced with renewable energy.

Craig Barker, the 87-year-old company's managing director, stated to Reuters, "We intend to be among the first to transition to hydrogen."

Barker stated that energy costs account for sixty to seventy percent of the company's variable expenses.

Kelheim Fibers is one of the several small and medium-sized businesses that make up the largest economy in Europe and are diversifying their energy mix to maintain output.

Russia's reduction of gas supplies to Germany following Moscow's invasion of Ukraine in February prompted Berlin to restart or extend the lifespan of its coal-fired power plants, thereby compromising environmental emissions standards.

According to IFO economist Klaus Wohlrabe, the economic downturn may result in greener production.

"Use of fossil fuels over an extended period of time is hazardous. Mid-term, companies must redirect their efforts." 

Kelheim Fibers, which has met 85 percent of its energy requirements using natural gas, is in discussion with interested parties on the importation of hydrogen beginning in 2025.

"We need infrastructure," he continued, explaining that a pipeline will be required to connect the German refinery Bayernoil to a port in order to meet the company's hydrogen demands.

This month, Germany's Ministry of Economic Affairs approved a network of hydrogen pipelines. It also presented a plan to assist SMEs in transitioning to climate-neutral production, which includes the development of hydrogen infrastructure.

BDEW asserts that a Hydrogen Act is necessary to reduce red tape and expedite the hydrogen deployment process.

BDEW president Kerstin Andreae stated that by 2023, investments in renewable energy, hydrogen, hydrogen-capable gas-fired power plants, and energy networks must be increased.