“Hydrogen Germany, Russia” Partners Competitors?

Hydrogen Germany, Russia, one has the technology, the other the resources. Germany could be offered hydrogen by Russia, or gas to produce it. However, in both cases this will compromise its energy independence. This situation could also accelerate the development of Nord Stream 2.

Hydrogen Germany, Russia: the other Russian ambition

Hydrogen in Germany should be able to benefit from the €1,000 billion investment in renewable energy (RE) planned by the European Union (EU) and its Green Pact for carbon neutrality by 2050. On the other hand, the Germans did not wait for this pact to take a look at green hydrogen.

With its Hydrogen Strategy 2030 program, Germany has already planned to invest nine billion euros in hydrogen. The country’s major companies such as Uniper, Wintershall, Verbundnetz or Siemens will be taking part. This country, which claims to be a pioneer in the field of ecology, had nevertheless increased its dependence on fossil fuels with the gradual disappearance of nuclear power from its energy mix.

A Strategic Plan for Energy 2035 in Russia

In the East, Russia is also preparing for thehydrogen battle. Its Strategic Energy Plan 2035 plans to increase its exports from 200,000 tons in 2024 to 2 million tons in 2035. Like other fossil fuel producing countries, Russia is looking for ways to reconvert as the consumption of fossil fuels approaches a probable peak.

The country has more first choice competitors in order to achieve these objectives. First, it has all the materials needed to produce hydrogen: nuclear and water for cleaner processes; methane from natural gas for more polluting but less expensive processes. These are the ones that are most used today to produce hydrogen.

Secondly, these large state-owned companies, Gazprom and Rosatom, have proven knowledge that can be adapted to hydrogen production. They are in the process of completing the necessary infrastructure for production and already have facilities to sell it in Europe.

In parallel with the development of hydrogen production capacities, Russia also wants to develop its hydrogen exploitation technologies. The country is working on its hydrogen engines, hydrogen public transport, etc. It is therefore a question of creating a whole sector that would also supply the country’s domestic market.

So, partners or competitors?

While Germany has the technological potential to producehydrogen, it lacks the materials that Russia has in abundance. With no nuclear power available, one solution would be to use the excess energy produced by wind turbines during peak periods to convert water into hydrogen. However, this source of energy is far too limited to allow, for the moment, a production of hydrogen satisfying the national ambitions.

A second solution would be to import the methane from Russia and process it in Germany. However, this polluting option only seems satisfactory on one condition. That of an improvement of the carbon capture systems (CSS) resulting from the process. In addition, German hydrogen production would remain dependent on Russia.

A dependence on Russia

Germany will therefore have to buy eitherhydrogen or gas from Russia for a long time to come. According to Alexei Gromov, Director of the Energy Department of the Russian Institute of Finance and Energy, Europe will remain dependent on hydrogen until at least 2040. It also seems that the Russians are not particularly interested in having their methane transformed outside their borders.

Indeed, a consolidated hydrogen industry would offer the country a conversion of its gas pipelines if Europe were to turn away from gas. The country’s pipelines could, according to members of Gazprom, carry up to 70% (or even 90%?) of hydrogen. Russia also believes that Europe’s dependence on its hydrogen will extinguish the challenges surrounding the construction of the Nord Stream 2 pipeline.

But then, competition or cooperation?

The rivalry between the two countries in thehydrogen market should not obscure the fact that they are also major trading partners. It should be noted that German Chancellor Angela Merkel remains one of the strongest supporters of the Nord Stream 2 project, despite the Navalny affair. It must be said that the country is the first importer of Russian gas. Conversely, Russia needs its customer to develop its hydrogen industry.

Finally, we remember that Gerhard Schröder, former chancellor, was linked to the gas group Gazprom before joining the board of Rosneft in 2017. While this is far from being the case for hydrogen, the two countries are already cooperating closely. For example, Gazprom is already working with German companies on a way to produce hydrogen with natural gas without emitting CO2.

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