Germany and Saudi Arabia have signed a groundbreaking green hydrogen deal, marking a significant milestone in the sector. The agreement aims to produce 200,000 tons of hydrogen using wind and solar power, which will be shipped to Europe annually from 2030 onwards.
Germany and Saudi Arabia Sign Groundbreaking Green Hydrogen Deal
The memorandum of understanding between Germany’s state-owned Securing Energy for Europe (SEFE) and Saudi Arabia’s ACWA Power marks a significant milestone in the green hydrogen sector. Under this agreement, 200,000 tons of hydrogen produced using wind and solar power will be shipped to Europe annually from 2030 onwards in the form of ammonia.
Green hydrogen is a clean-burning fuel produced by splitting water molecules into hydrogen and oxygen using renewable energy sources.
This process, known as electrolysis, generates hydrogen without emitting greenhouse gases or pollutants.
Green hydrogen has the potential to replace fossil fuels in various industries, including transportation, power generation, and industrial processes.
In 2020, Germany launched a green hydrogen project aiming to produce 5 GW of green hydrogen by 2030.
The International Energy Agency (IEA) estimates that green hydrogen could account for up to 24% of global energy demand by 2050.
Key Components of the Agreement
The green hydrogen, with an energy content of almost 6.7 terawatt-hours, is expected to play a crucial role in Germany’s energy requirements. The gas will primarily be used to produce steel and generate electricity when wind and solar power are insufficient. ACWA Power aims to become a leading developer, investor, and operator of production facilities for green hydrogen and green ammonia.
Germany’s Hydrogen Strategy
As part of its hydrogen strategy, the German government foresees hydrogen imports in 2030 of between 45 and 90 terawatt-hours. Germany sees hydrogen as a vital component in meeting its energy needs, alongside electricity produced from renewables. SEFE will serve as a co-investor and primary off-taker, leveraging its position as one of Europe’s largest energy trading companies to market the green hydrogen to its German and European customers.
Expansion of Hydrogen Imports
This agreement is not an isolated effort by SEFE. The company has previously announced hydrogen import agreements with Brazil‘s Elektrobras for 200,000 tons annually from 2030 and with Norway‘s Equinor on low-CO2 hydrogen for the period 2029 to 2060. Germany aims to import hydrogen with an energy equivalent of between 360 and 500 terawatt-hours by 2045, along with 200 terawatt-hours of hydrogen compounds.
Hydrogen imports refer to the transportation of hydrogen gas from one country to another.
This process is becoming increasingly important as countries transition to low-carbon energy sources.
According to the International Energy Agency (IEA) , global hydrogen demand is expected to grow by 50% by 2030.
Major exporters of hydrogen include Australia, Qatar, and Saudi Arabia, while major importers include Japan, South Korea, and Germany.
Hydrogen imports can be transported via pipeline or ship, with liquefaction being a critical step in the process.
The signing of this memorandum marks a significant step towards reducing carbon emissions in Europe and highlights the growing importance of green hydrogen in meeting global energy demands.
