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12|23
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Issue title:

Hydrogen core network

Publication date:
06.12.2023
In this issue:

On November 15, the German energy transition and its financing took a major blow. On that day, the Federal Constitutional Court declared the financing for the Climate and Transformation Fund (KTF) to be unconstitutional. In particular, this means a financing gap of 60 billion euros. Among other things, this could mean that an important pillar for financing the hydrogen ramp-up might break away. The parties of the governing coalition have basically become entangled in the conflict between the debt brake and the financial requirements for the energy transition. It is certainly debatable whether the high level of state funding, particularly for the hydrogen market ramp-up, is justified and whether the funding instruments are efficient. Ultimately, we are betting that hydrogen will be so cheap in Germany in the future that industrial processes using decarbonised hydrogen will remain financially viable. As an industrialised country, we may have to make this bet, but then we will have to look for a financing model that is compatible with the constitution. The next few weeks will show whether this is possible and what funds will then remain.

Topic of the month: Hydrogen core network

In November, the development of the hydrogen grid picked up speed. Although not a single metre of pipeline has yet been laid and no pipeline section has been refurbished, the German framework conditions for hydrogen grid development are becoming clear:

On 3 November, the Federal Ministry for Economic Affairs and Climate Action (BMWK) sent the draft bill with regulations on the financing of the hydrogen grid to stakeholders for consultation. Like all regulations on hydrogen grid development, the financing rules will also become part of the Energy Industry Act (EnWG) (Section 28r and s). It was 1:10 pm on a Friday when the email was sent to the stakeholders. After all, there was time to comment by 5 pm on Monday, 6 November. The tough schedule did not amuse some market participants. The ministry imposed the early deadline because the cabinet was due to approve the regulations on 15 November, which it eventually did.