Germany has begun to adapt and enhance the existing legal framework to accommodate hydrogen, albeit some legislation – mostly executing ordinances – is still missing. Fields of legislative activity inter alia consider the following fields (other than already described in part 4):
Network planning and regulation
Legislation is currently being drafted to include provisions for the planning of the hydrogen core network in the Energy Industry Act (EnWG). The German gas TSOs, in coordination with the Federal Network Agency (BNetzA), will be tasked with developing the hydrogen starter network within an ambitious timeframe of less than one year in total - which they may still be able to meet, as they have already started the planning process without waiting for the legislation.
Regarding the regulation of pure hydrogen networks, the government has chosen a gradual approach: As an initial step, hydrogen network operators can opt to become subject to regulation for their entire hydrogen network if BNetzA has confirmed an adequate need for its hydrogen infrastructure. If an operator opts into regulation, certain obligations will apply, regarding e.g. grid connection and grid access.
- operators of hydrogen networks may not own electrolysers or storage facilities (unbundling).
- network tariffs to be levied from the hydrogen network users have to be non-discriminatory and cost-based (planned vs. actual cost), but are not subject to approval by BNetzA.
- permits and easements for gas networks that are converted for the transportation of hydrogen are grandfathered.
Defining different types of hydrogen and gas guarantees of origin
Regarding using green hydrogen products for reducing greenhouse gas (GHG) emissions in the fossil fuel mix for road and aviation transport, a draft ordinance (the 37. BImSchV) has been published by the Federal Ministry of the Environment which closely mirrors the European definition of the DA I (see above).
Although the Renewable Energies Act (EEG) contains a definition of green hydrogen, many provisions relying on this definition cannot currently be put into practice because the required implementing ordinance to be issued by the Federal Government has not yet been put in place.
For the purpose of issuing guarantees of origin (GO) for gas from renewable sources and for low-carbon gases, an Act on Gas and Heat GOs (HkNRG) has been enacted. An implementing ordinance is yet to be enacted. According to a first draft, GOs for low-carbon hydrogen products may be issued for hydrogen products that either fulfil the GHG reduction quota of the DA II to the EU RED or the sustainability criteria for the Climate DA to the EU Taxonomy regulation. For hydrogen products produced with renewable electricity stricter rules than for RFNBOs under the RED II DAs shall apply to receive a gas GO.
Clarifying different use cases for hydrogen
For new gas infrastructure (networks, power plants, LNG terminals) legislation has been introduced requiring them to be “hydrogen-ready” to avoid fossil lock-ins.
For distributors of fossil fuels to the road transport and aviation sector, a GHG emission reduction obligation exists which both directly and indirectly incentivises the production of hydrogen products.
In addition, the current German government has put an emphasis on “technology-openness” when introducing rules for the decarbonisation of the passenger car fleet as well as for renovation of the building stock. E-fuels and hydrogen products will thus be the legally acknowledged means to reach GHG emission reduction goals in these sectors – whether these options are in the end the most economic viable solution is, however, debated.
Click here for further information on the current thinking on regulations in Germany.