Ministry spells out details of hydrogen support, consumer and renewables lobbies not satisfied

A proposal on how hydrogen producers could be exempt from paying the renewables levy on the electricity they use has been criticised for not focusing purely on green hydrogen and putting an extra burden on private households. After the German federal parliament adopted a reform of the Renewable Energy Source Act (EEG) in the end of 2020, the energy and economy ministry (BMWi) has now opened a consultation on the new package of rules providing the details for support to renewable energy installations and hydrogen production.

The draft ordinance contains an extended area for agri-photovoltaic plants, specifications on the so-called innovation tenders for storage capacities and follow-up support for small-scale liquid manure plants. It also regulates the exemption from paying the renewable energy surcharge (EEG levy) for electricity used to produce green hydrogen. The EEG levy is generally paid by all electricity consumers with their power bills and the money is used to pay for feed-in support of renewable installations. Large energy-intensive consumers are (partially) exempt from paying the surcharge. Renewable Energy Association BEE criticised that there are two different ways for hydrogen producers to be (partially) free from paying the surcharge. While sustainability criteria are applied to the production of green hydrogen with renewable electricity in one paragraph, another section of the bill allows for a reduction of the levy if an energy intensive company largely focuses on electrolysis regardless of the “colour,” i.e. the source of electricity used in the process.

Consumer organisation VZBV said that reducing the renewables levy for hydrogen producers should not place a burden on private consumers. They argued that this support for the hydrogen industry should be paid for through taxes instead.

The follow-up subsidy for smaller liquid manure plants after the expiry of the previous feed-in support under the Renewable Energy Act (EEG) in 2024 was criticised by the German Biogas Association (Fachverband Biogas). It argued that the planned remuneration of 13 cents per kilowatt-hour was “far removed from any economic viability” for the plant owners. Instead of using more liquid manure in biogas plants, the draft bill would exclude many plants from continuing operations, because it prohibits the downsizing of existing plants and the increased use of liquid manure.