Outdated approval procedures make it difficult to meet the German government's electrolysis expansion target
The German Federal Ministry of Economics and Technology (BMWK) under Robert Habeck even recently announced its intention to increase the electrolysis expansion target to 15 GW as part of the planned update of the National Hydrogen Strategy. But industry representatives already see an expansion gap. This is shown by calculations of the German Academy of Science and Engineering Acatech and the network for chemical engineering and biotechnology Dechema. According to these, only 4.3 GW of projects have been planned so far by 2030. The reasons for the reluctance to invest in and initiate further projects lie in legal uncertainties, in addition to the delays by the EU Commission in approving the multi-billion hydrogen production projects under the IPCEI program. Here, for example, the industry is waiting with bated breath for the EU bodies to reach agreement on the criteria for the production of green hydrogen under the Renewable Energy Directive (RED II). And at the national level, too, legal uncertainties regarding the planning and approval of electrolysers, among other things, have so far prevented the necessary green hydrogen boom from materializing.
Recognize planning and permitting law as a major obstacle.
If green hydrogen is to be available in good time and in sufficient quantities, today's still rather small production capacities must be rapidly increased many times over. Green hydrogen is produced by the so-called electrolysis process, in which water is split into oxygen and hydrogen using renewable electricity. As important as hydrogen electrolysis is for the success of the energy turnaround, it is difficult for such plants to get through the approval process quickly. Representatives of the three major hydrogen projects H2Giga, H2Mare and "TransHyDE", which are funded by the German Federal Ministry of Education and Research and supported by science and industry, regard the lengthy planning and approval procedures for electrolysers as a major obstacle on the way to a green hydrogen economy.
What is possible with LNG should be even more possible with green hydrogen.
Accelerating the process would be well within the bounds of what is legally possible. The LNG Acceleration Act shows that faster approval procedures for major infrastructure projects are possible. The law is intended to enable terminals for the import of liquefied natural gas (LNG) to be realized much more quickly than is the case with other infrastructure projects. To this end, participation rights are to be restricted and the environmental impact assessment is to be effectively abolished. The justification for this - highly controversial - step is that the looming energy crisis cannot be averted in any other way and that the projects are in the overriding public interest and in the interest of public safety.
While the LNG terminals are merely a short-term bridge solution, electrolysers are an absolutely essential component of the energy transition. They in particular should therefore be recognized as projects in the overriding public interest and - just as in the LNG Acceleration Act - corresponding acceleration measures should be taken.
Legal uncertainties in approvals for electrolysers.
In addition, legal uncertainties in existing approval practice must be reduced. It must be clear to the operators of electrolysers which specific requirements are relevant for the approval of their plants. As obvious as this may sound, this is often not guaranteed today. In many cases, there is uncertainty regarding the classification of electrolyzers under the two possible licensing statuses in the German Federal Immission Control Act (BImSchG): While the simple approval procedure leads to relatively rapid project realization, the formal approval procedure requires mandatory public participation. In many cases, it is not clear which of the two types of procedure is relevant in a specific case. As a rule, the formal procedure applies to larger production facilities. In this case, approval often takes several months. Here, after the application for approval has been submitted, the project must be made public and the application documents must be made available for one month. Subsequently, objections to the project can be raised for two weeks. These are dealt with at a later hearing, and the approval authority does not have to make a decision on the application until seven months have elapsed. Even though public participation can increase the legitimacy of the project, it leads to a considerable extension of the procedure as well as increased costs. Considering the importance of electrolyser projects for the success of the energy transition and the compliance with the electrolysis expansion target of the German government, a pragmatic approach should be chosen here - just as in LNG policy.
In addition, the classification of electrolysers as so-called industrial emission facilities worsens the current permitting situation. It imposes further obligations on the operators, which make the projects more expensive and further prolong the approval process. The classification dates back to a time when hydrogen was produced by fossil-based steam reforming. In the context of hydrogen production based on electricity from renewable energies, however, it is no longer appropriate. This is because the directive aims to prevent and reduce environmental pollution, especially emissions caused by industrial processes. Electrolysers that use green electricity to produce renewable hydrogen contribute to achieving this goal, and their approval should therefore be facilitated by the directive, not made more difficult.
Legislators must now create a permitting framework that stimulates, not inhibits, investment in electrolysers. The LNG Acceleration Act shows that the legislator is aware of the steps needed to achieve this. Corresponding steps must also be implemented immediately for hydrogen electrolysis.
By Regulatory Consultant Cäcilia Gätsch and Communications Consultant Benita Stalmann
10 gigawatts (GW) of electrolysis capacity is to be realized in Germany by 2030, according to the coalition agreement. The German Federal Ministry of Economics and Technology (BMWK) under Robert Habeck recently even announced its intention to increase the electrolysis expansion target to 15 GW as part of the planned update of the National Hydrogen Strategy. But industry representatives already see an expansion gap. This could become more entrenched if the necessary reform of the approval procedures for electrolysers fails to materialize, analyze Cäcilia Gätsch Regulytorik expert and Benita Stalmann, political communications expert at 𝗰𝗿𝘂𝗵2𝟭. Do you have any questions about legal issues related to green hydrogen? Then feel free to write them to us in the comments.