Using international energy partnerships for the ramp-up of the hydrogen economy
50 years of German-Russian energy partnership also offers opportunities to develop the future of energy
Hydrogen is of great importance on the path to climate neutrality, thanks to its versatile applicability in all sectors. It can be produced directly from natural gas, not only through electrolysis from electricity, but also through various technical processes, largely without CO2 emissions. Due to the increasing demand, hydrogen imports and thus agreements with partners from third countries are indispensable from a German perspective. Also the established energy partnership with Russia offers a great potential for this. As a company, we have maintained solid business relations with Russia since the first contracts for natural gas supplies were signed more than fifty years ago.
In addition to the existing gas infrastructure, which in the future will allow an increasing blending of hydrogen, Russia itself, with its gas reserves and CO2 storage possibilities, offers a high potential for the production of hydrogen from natural gas, with subsequent separation and storage of CO2. Based on the cooperation with our Russian partners (Gazprom and Novatek), an innovative hydrogen partnership with Russia can now also be established with concrete projects. Furthermore, the high potential of renewable energies in Russia (e.g. wind energy) offers the opportunity to produce green hydrogen there as well. The German government supports a hydrogen partnership in the course of its bilateral exchange with Russia on sustainable energy solutions and with its overarching international approach of "hydrogen diplomacy".
Together into a decarbonized future
In the future, we can make a significant contribution to the energy transition together with Russia. Our exchange on hydrogen with our partner Gazprom already shows that sustainability is higher on the agenda in Russia. Our Memorandum of Understanding with Novatek also paves the way for a long-term hydrogen supply and joint technology projects. This will stimulate demand for these technologies. New applications of gaseous energy carriers can play a decisive role in the future for the established German-Russian energy partnership with hydrogen beyond natural gas and thus contribute to climate neutrality. Exactly what we were able to achieve with natural gas together with Russia decades ago (reliable production and delivery of large quantities that ensure security of supply), we must transform into the future. The further development of technology, based on existing know-how, serves the common goal of climate protection.
Half a century of energy partnership
Our successful cooperation with Russia celebrated its fiftieth anniversary last year. Already with the signing of the first natural gas supply contract under the framework of the natural gas-pipe-business in Essen on 1 February 1970, we helped to shape the energy transition with our predecessor company Ruhrgas AG at that time. The successful use of the more environmentally friendly natural gas was not a matter of course at that time, in the light of the strong role of coal in the German energy mix.
The signing of the contract more than fifty years ago still forms the basis for our other gas import contracts with Gazprom. The 1970 contract thus remains a basis for the future energy partnership with Russia, and it has always been a guarantor of German-Russian relations. In 1973, Russian natural gas flowed across the German border near Waidhaus in Bavaria for the first time. In the course of the following years, the contracts were extended and the always reliable natural gas supplies increased. Even then there were political challenges: The first supply contract, still concluded with the Soviet Soyuzgazexport at the time, did help to ease the East-West conflict. A few years later, however, at the beginning of the 1980s, further negotiations became the subject of world politics due to criticism from the USA, and everything was overshadowed by the Cold War. Nevertheless, the partnership was reaffirmed and new agreements on additional deliveries were concluded. The deliveries were accompanied by comprehensive technical cooperation, which already in the 1990s, after the conclusion of the Kyoto Protocol in 1990, also included the improvement of environmental standards or the reduction of methane emissions in the transport of natural gas.
It remains our goal to combine economy with ecology. In the future, we will continue to reduce our CO2 footprint in the gas business. That is why we have started to shape the transformation of natural gas towards climate neutrality with hydrogen and corresponding technologies, also together with our Russian partners. Our business relations with Russia, which have lasted for over half a century and are part of the company's DNA, offer the best conditions for this.
EU Green Deal as an opportunity for a pan-European energy partnership
The "EU Green Deal" should also be seen as an opportunity for this energy partnership and, as a result, should also be turned into a positive agenda in the relationship with Russia, especially in these politically tense times. As a company, we support this position of the German Federal Government. Germany and Russia are currently celebrating the bilateral Year for Economy and Sustainability. This results in numerous opportunities for companies in the course of economic cooperation in the light of joint efforts to protect the climate. As described, hydrogen can play a decisive role in the decarbonization of gas.
Individual points of the current debate on the Green Deal, e.g. the EU Commission's considerations on the design of a Carbon Border Adjustment Mechanism ("CBAM"), should not become a divisive issue between the EU, Russia and the non-EU states that are currently critical of such an instrument (e.g. the USA, Australia and Turkey).
Other German companies from various economic sectors, with whom we cooperate in the German Eastern Business Association, also support a positive approach to the Green Deal. With this, the European Commission has put sustainability into focus. With the planning and implementation of extensive measures, the goal is to become the world's first climate-neutral continent by 2050. We are one continent, so it is important that we talk together about possible ways forward and support each other. It is also important to constructively involve the states in Central and Eastern Europe, including Ukraine, in whose regions fossil fuels and coal production still play a major role. The entire European continent, which also includes Russia, should be able to engage in this necessary and ultimately rewarding transformation.
The latter, in my meaning (which I have been proving in my publications and presentations for long), covers even broader geographical area than just geographical Europe. It covers the whole geographical space united by the cross-border immobile capital-intensive long-distance large-volume gas infrastructure. This means it includes both geographical Europe (which already means much broader area than just the EU) and part of Eurasia (like Western Siberia where major cross-border gas flows to Europe originate from, and Central Asia which historically has been an integral part of the United USSR gas transportation grid and still now remains a part of the above mentioned cross-border infrastructure) and also Northern Africa (connected by the trans-Med pipelines with the EU).
Your emphasis on technological cooperation in the gas-based decarbonisation is very correct, both in production and especially in transportation options, additional to pipeline transportation of H2/MHM in gaseous form. I do consider (and not me only) the latter as absolutely counter-productive if/when such potential option is considered for H2/MHM transportation from Russia to the EU through existing common Russia-EU gas transportation grid: being designed for transport of methane and has been successfully working for such puprpose for already 50 years, as you correctly stated, it is totally unaccomodative and inadaptive to H2/MHM transportation purpose in a sustainable way).
This is why at one of the recent meetings of the Work Stream 2 "Internal markets" of the Russia-EU Gas Advisory Council we have initiated discussion on "A “Clean Hydrogen from Natural Gas Alliance” Proposal – why it is in mutual benefit for the EU and Russia " (see: http://www.konoplyanik.ru/speeches/200918-Konoplyanik-WS2GAC-final.pdf).
This was proposed further to and/or in addition to, and not instead of and/or not as a part of, EU Clean Hydrogen Alliance since the latter is predominantly or even exclusively aimed at the so called "green" H2.
First of all, I mean, we should jointly address the technological challenges related to producing "clean" H2 (in the meaning - without direct CO2 emissions, like in the case of so called "green" H2) from natural gas, i.e. the spectrum of pyrolysis technologies. I know at least six of those at the moment, in some of those both Germany and/or Russia (I mean: German and/or Russian companies) have their competitive advantages and breakthroughs.
Only by joining efforts in this area (thus putting our common long-term interests above individual short-term interests of individual companies, which prevail today) we can speed-up decarbonisation path in a more cost-saving and sustainable way for all.
Regarding political aim of the Commission which "goal is to become the world's first climate-neutral continent by 2050" I would say that it is only possible within the distorted frame of references, when only direct emissions (Scope 1 & 2) are considered and Scope 3 emissions are deliberately ignored.
Within current global interdependence in material goods flows this aim is impossible to reach under correct (non-distorted) methodological approach. Why so? Because much of RES equipment used in the EU is imported into the EU from, say, China. But RES equipment is much more material-intensive in production compared to equipment for electricity generation based on fossil fuels. Thus production of RES equipment is accompanied by higher emissions, though emitted beyond the EU borders.
These Scope 3 emissions are not considered under stated political aim of the Commission, while climate problem stays as a global one not a regional one. So it is not possible in principle for any region to become "emissions free" if Scope 1-2-3 are considered.
Under such methodologically correct approach which considers all THREE Scopes 1-2-3, ALL energies, non-dependent renewable or non-renewable, became at best low-emission (not zero-emission). By the way, if all three scopes are considered, this will further stimulate the companies and the countries to go forward with diminishing their emissions.
And this requirement to consider all three Scopes might be soon a legally binding - at least two precedents have been already created both on a corporate and on a state levels, both in April 2021: court decisions in The Hague on Shell and of German Constitutional Court.
So perceived absolute priority of so called "green" H2 as if the only really clean H2 dissolves in the air...
Predetermined political priority of this so-called "green" H2 enabled Commission to put it under preferential treatment and to discriminate all other H2-production technologies, including H2 production from natural gas, up to direct ignoring of pyrolysis technologies in the EU Hydrogen Strategy (the word "pyrolysis" is only mentioned there twice, while first time incorrectly as the synonym of methane steam reforming, which it is not). And such preferential treatment is based on a wrong methodological background and it violates stated in the EU regulatory principle of "technological neutrality".
This is why when political aims are based on politically attractive wishful thinking which are put first but which are not based on sustainable technical and economic fundament, this leads to distortion of frame of reference with the aim to prove only partially valid political aims. But such distorted frame of references will prevent reaching mutually beneficial sustainable solutions between different sovereign states, even if it is accompanied by climate-protection proclamations to other states and companies for being more-and-more ambitious in this regard. It is not possible to build a mutually-beneficial by-lateral and/or multilateral cooperation or a wrong or even partly distorted methodological fundament.
One of such methodological distortions is a generally accepted within the EU perception and thus wording of building a "decarbonised" and/or "carbon-free" or "zero/net-zero carbon" society instead of "de-emissioning" and/or "emission-free" or "zero/net-zero emission" society. The first terminology means (indirectly pushes) to escape from fossil fuels (since the molecules of carbon are present in such fuels). Such approach neglects technological progress per se, since we shall aim our common R&D not on "decommissioning" of fossil fuels, but on "de-emissioning" of their use through the whole gas value chain, and not only on developing of RES to the unsustainable levels of their presence in the energy mix.
Pyrolysis technologies are among such priorities for some companies and institutions/universities on both sides now (in Russia and the EU). And they should be placed on the much upper positions in the common hierarchy of priorities within, say, such proposed "Clean Hydrogen from Natural Gas Alliance".
So in line with technological cooperation in a gas-based decarbonisation technologies we shall aim on reaching a new energy mix which will not consist only, as proclaimed in the EU since January 2018, on "RES electricity plus decarbonised gases" (a step forward from the previous totally unrealistic vision to build a "100% RES-electricity-based" energy economy), but on a competitive mix of different energy resources (both renewables and non-renewables, this combination will be individual in each sovereign state, incl. within Broader Energy Europe) which will be decarbonised through all their value chains and within business cycles of individual energies while considering emissions through Scopes 1-2-3.
You can get acquainted with some of my writings/presentations on this (though mostly in Russian, but in English as well) at my website www.konoplyanik.ru.
Hope my comments were helpful.
Ready to continue exchange of views in any appropiate format with the aim to reach/develop a balanced practical approach to cooperative way forward.
Sincerely yours,
Prof. Dr. Andrey A.Konoplyanik,
Adviser to Director General, Gazprom export LLC,
Co-chair from the Russian side, Work Stream 2 "Internal Markets", Russia-EU Gas Advisory Council (https://minenergo.gov.ru/node/14646),
Member of the Scientific Council on System Research in Energy, Russian Academy of Sciences