Australia has huge renewable energy resources for producing green hydrogen © amophoto/AdobeStock

HySupply: German-Australian Feasibility Study of Hydrogen

Since December 2020, the BDI and acatech, together with an Australian consortium, have been investigating for the first time whether and how the import of renewable hydrogen from Australia can succeed. The findings from the project should pave the way for a long-term hydrogen partnership between the two countries.

The project is a result of the previous acatech/BDI cooperation project "Pathways to the Energy Future", whose last fact-finding mission led to Australia. With the support of the German Federal Ministry of Education and Research (BMBF), a German delegation met with leading research institutions and companies in the field of energy and hydrogen. The most important finding of the trip: Australia is a suitable partner for a long-term hydrogen partnership with Germany.

Australia is rich in renewable energy and has a low cost of renewable electricity. As one of the largest energy exporters, the country has excellent skills and infrastructure for exporting raw materials. To exploit this potential, Australia needs large-scale hydrogen technologies, especially in the field of electrolysis. Germany has the required technologies and know-how, and at the same time will be dependent on imports of renewable and low-CO2 hydrogen in the future. A possible win-win situation!

The project

The German project group is jointly coordinated by acatech and the BDI and funded by the BMBF. The Australian consortium is led by the University of New South Wales (UNSW) and funded by the Department of Foreign Affairs and Trade (DFAT). Together, the two sides combine a unique network of companies and scientific experts to investigate the entire hydrogen value chain in terms of technical, economic and regulatory barriers.

Illustration of a potential German-Australian hydrogen supply chain © BDI/acatech

For the implementation of the bilateral supply chain for renewable hydrogen it is important to act quickly, concretely and on a large scale. That is why HySupply has acted as a platform for continuous exchange and dialog with the Australian partners from the very beginning. In addition, match-making between German and Australian companies is actively pursued in order to bring together the right stakeholders and to support the initiation of concrete implementation projects on an industrial scale.

Why do we need hydrogen from Australia?

That Germany can be energy self-sufficient is an illusion. Especially against the backdrop of the Russian war of aggression, it becomes clear how much Germany is dependent on imports of fossil fuels. Similarly, Germany will depend on the imports of hydrogen and hydrogen-based energy carriers, so-called power-to-X products (PtX). The National Hydrogen Strategy published in 2020 aims to build five GW of electrolysis capacity in this country by 2030. Even with the target of ten GW by 2030 defined in the coalition agreement, demand exceeds domestic production by far: while these ten GW could produce around one million metric tons of renewable hydrogen, the German government assumes hydrogen demand of up to three million metric tons. At the European level, the REPowerEU plan which has been presented in response to the Russia-Ukraine war also aims for a target of ten million tons of domestic production of renewable hydrogen plus ten million tons of imports by 2030.

Therefore, it is important more than ever to cooperate with strong and reliable countries in order to diversify hydrogen imports and thereby ensure security of supply. One of these countries is Australia.

What are the options to import renewable hydrogen from Australia?

As a first milestone, the working paper of the German project group "A Meta-Analysis towards the German-Australian Supply Chain for Renewable Hydrogen " has investigated four transport options for the import of renewable hydrogen from Australia: Liquid Hydrogen (LH2), Liquid Organic Hydrogen Carriers (LOHC), Ammonia (NH3), and Methanol (MeOH). The results show that the transport options have different advantages and disadvantages and, most importantly, different levels of technological maturity. Nevertheless, there are also challenges that all options have in common such as the fluctuating power generation from renewable energy sources or the lack of relevant infrastructure such as export and import terminals. In addition, there are still regulatory uncertainties for all options, especially with regard to the legally secure definition of "renewable" hydrogen and PtX products.

What role does the distance to Australia play?

The distance between Germany and Australia is considerable. For example, there are no direct flights and the shipping route between the two countries is approximately 21,000 km. Nevertheless, the German-Australian trade volume in 2020 was more than eleven billion euros. Most of these products come from the automotive, pharmaceutical and raw materials sectors, especially hard coal. This shows that distance is already no obstacle to the trade of goods from Australia. On the contrary. The EU wants to strengthen trade relations through the planned free trade agreement with Australia.

With regard to costs of transporting hydrogen, the working paper of the Australian project group "The Case for an Australian Hydrogen Export Market to Germany: State of Play Version 1.0" shows that shipping accounts for only a fraction of the total costs, especially for the technically mature transport options. For example, at hydrogen production costs of four Euro/kg, transport in the form of ammonia accounts for only a seven percent share, or between seven and nine cents per kilo of ammonia. In the case of methanol, the share is around five percent at four to six cents per kilo of methanol.

How climate-neutral is the hydrogen imported from Australia?

It is a fair question to ask how climate-neutral the hydrogen still is when it arrives at the port in Germany or the EU. After all, worldwide shipping is responsible for around 2.6 percent of global CO2 emissions. Nevertheless, preliminary results show that the direct CO2 emissions of transport from Australia to Europe, including the return journey, are low to moderate, even with the use of heavy fuel oil. The size of the ship plays a decisive role here, which is why the specific CO2 emissions of large tankers, such as those for ammonia and methanol, are still well below existing limits, such as those of the taxonomy or the TÜV SÜD standard for green hydrogen.

In the end, it is decisive that the climate-neutral property of the hydrogen supplied is credibly traceable. This requires a uniform international certification system based on the hydrogen's carbon footprint.

Are there regulatory barriers to importing renewable hydrogen from Australia? This question has been investigated by the study commissioned by HySupply from the Institute for Climate Protection, Energy and Mobility (IKEM) on the regulatory framework for a German-Australian hydrogen bridge. The results show: importing hydrogen from Australia to Germany via the four transport options investigated (LH2, LOHC, NH3, MeOH) is in principle legally feasible. However, in some cases there are high legal requirements that make the implementation of the respective pathways considerably more difficult. For example, one of the major obstacles is the construction of import terminals, including the safety distances to be maintained from adjacent infrastructure, which means that not every port in Europe is suitable for importing all of the four hydrogen carriers. In addition, there are land-based route restrictions, for example, for the transport of ammonia. In general, it is clear that accelerated planning and approval procedures are needed for a timely implementation of the supply chain, e.g. in the area of shortening the time for public participation or making compensation measures more flexible in terms of time.

Who works with HySupply?

The added value of the project is provided by the broad expertise of the professionals involved. From industry, a number of companies and associations have been involved since the start of the project, including Air Liquide S.A., BASF SE, E.ON SE, Hafenbetrieb Rotterdam, Deutsche Lufthansa AG, Linde GmbH, Wirtschaftsverband Fuels & Energie (en2x), RWE Supply & Trading GmbH, Siemens Energy AG and thyssenkrupp Steel Europe AG. Further companies such as Robert Bosch GmbH, SAP SE, Schaeffler AG, and thyssenkrupp nucera have also joined the German group recently.

In addition, leading experts from the research community contribute their expertise, including Veronika Grimm (Friedrich Alexander University Erlangen-Nuremberg), Christian Growitsch (Fraunhofer Gesellschaft), Christopher Hebling (Fraunhofer ISE), Andreas Löschel (Westfälische Wilhelms University Münster), Karen Pittel (ifo Institute), Peter Wasserscheid (Friedrich Alexander University Erlangen-Nuremberg), Michael Sterner (East Bavarian Technical University Regensburg) and Maike Schmidt (Center for Solar Energy and Hydrogen Research BW, ZSW).

What’s next for HySupply?

So far HySupply has focused primarily on identifying the technical, economic and regulatory barriers. In a second step - the so-called roadmapping process - it will be analyzed what needs to happen to realize a German-Australian supply chain for renewable hydrogen by 2030. This will focus in particular on the measures that need to be implemented as soon as possible to enable implementation before 2030. In addition, the German side is working on the creation of a stakeholder catalog that identifies the needs and interests of relevant German companies and institutions for future hydrogen cooperation with Australia. Subsequently, the results and findings of the preliminary work will be compiled into a final feasibility study, the results of which are to be published in October 2022.