Germany fast tracks proposal for Norwegian blue and green hydrogen pipeline

Norway is seeking to "rapidly" firm up plans to export blue and green hydrogen it produces to Germany, potentially via a pipeline that would rival one being developed in Denmark.

The nations jointly agreed to conduct a feasibility study at a 16 March meeting between Norwegian Prime Minister Jonas Gahr Støre, Norwegian Petroleum and Energy minister Terje Aasland, and German Minister of Trade and Industry Jan Christian Vestre.

Norway's proposal foresees the export of blue hydrogen initially, either via pipeline or another mode of transportation like ships. Lower-carbon green hydrogen made from renewable energy will be used ultimately. "In order to realize the fastest possible high-volume imports of hydrogen and ensure the rapid availability thereof, we will also jointly plan the use of blue hydrogen for a transition period," said the countries in the statement.

The announcement follows publication of a similar feasibility study by Denmark's network operator Energinet last year.

The Danish study foresaw pipeline exports of hydrogen from Esbjerg or Holstebro in Denmark to "industrial demand centers" in Hamburg in Germany. That pipeline, however, would use green hydrogen produced using Denmark's "abundance of renewable energy sources, particularly offshore wind."

A separate Dutch-German hydrogen pipeline, the AquaDuctus project, proposes a 10-km pipeline that would transport green hydrogen to Germany from offshore wind farms.

Hydrogen plans could turn blue

Norway and Germany are targeting net-zero emissions by 2050 and 2045 respectively.

So far, Germany has focused on compelling its industrial businesses to use green hydrogen to decarbonize. Germany spent $10 billion on projects aiming to create and use more green hydrogen, including in the steel industry, last year and has established incentives for green hydrogen fuel suppliers. Most recently, it proposed Carbon Contracts for a Difference for subsidizing industrial fuel switching to hydrogen in the future.

But Norwegian blue hydrogen imports could change this. Blue hydrogen can be made from natural gas using emerging Carbon Capture and Storage (CCS) technology.

The countries will not only join up to develop hydrogen and CCS but also offshore wind and assorted other greening technologies, for example, green shipping that might use hydrogen. They plan to cooperate more on offshore electricity networks for wind power through the 2016 North Seas Energy Cooperation framework.

Norway is home to the Longship CCS, a project to store and capture industrial emissions which the Norwegian government is aiming to complete by 2024.

As part of the latest deal, Norway and Germany will "significantly expand" efforts to store CO2 under the North Sea through their existing international partnership with the UK, the North Sea Basin Task Force.

Norway will aim to ensure the environmental integrity of its blue hydrogen exports, which would supply hydrogen as a product of processed natural gas, by establishing the "highest possible standards for CCS."Concerns linger over the ability of carbon capture projects to fulfill their emissions reduction aims. Shell's Quest CCS project in Canada was intended to reduce the emissions from crude oil processing, but it emits more greenhouse gases than it stores according to a January report by NGO Global Witness.

Norway's oil and gas ambition

Norway's government said part of its aim in the deal was "to supply both oil and gas and hydrogen to Europe." Norway is Europe's top oil-producing nation after Russia.

Earlier this week Norway's state oil company Equinor announced it would increase natural gas production at existing projects to meet high European gas demand.

The EU is scrambling to replace Russia as its main natural gas supplier after making the announcement it will phase out Russian natural gas imports by two-thirds this year and entirely by 2030. EU member states have followed this with a tentative agreement to phase out "oil and coal imports" as soon as possible, with the EC giving states until the tentative date of 2027.

This year before the start of the Russian-Ukrainian war, Norway and Germany had entered into a "long-term structured dialogue" to achieve climate, green industrial job, and energy security goals, but Russia's "bloody and illegal war" had piled on the pressure for measures "now," according to a joint statement by the countries.

"Over the coming months and years, it will be extremely important to speed up the development of alternative energy sources for Europe as substitutes for Russian gas and oil and to develop the necessary infrastructure for this," the countries said.

Posted 18 March 2022 by Cristina Brooks, Senior Journalist, Climate and Sustainability

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.