Hydrogen has at the latest been back in the spotlight since the European Green Deal and Fit for 55. In addition to tech and crypto, "hydrogen shares" have also seen a spectacular hype in the Covid year of 2021, although some disillusionment has set in in the meantime. Since the beginning of June 2022, Austria has now also had its "official" hydrogen strategy in place. This is a good reason to take a look at the new strategy paper (full text and Executive Summary available at: www.bmk.gv.at/themen/energie/energieversorgung/ wasserstoff/strategie) and briefly assess the current situation:
1. Overview of the new hydrogen strategy
Austria is now also committed to hydrogen – referred to as "green" (= renewable), "blue" (= from natural gas by means of complete CO2 capture) and "turquoise" (= produced by means of pyrolysis) - as one of the keys to climate neutrality, which, as we all know, Austria aims to achieve by 2040. However, priorities need to be set here. One priority isthe steel and chemical industries, another one is aviation and shipping as well as peak load balancing for volatile renewable energies. By contrast, passenger cars, residential heating and low-temperature processes in industry are not considered worthy of special consideration. High-temperature processes, long-distance coach and truck transport, as well as energy storage are apparently seen as somewhere in between these two extremes.
In other respects, a critical approach is taken to the use of existing infrastructure for the transport of hydrogen by blending it into thegas grid. Installations which add hydrogen to natural gas in the public gas grid were already denied subsidies under the Promotion of Renewable Energy Act (Sec. 62 par. 1 EAG).
2. Developments so far
The construction of plants for the conversion of electricity into hydrogen (or synthetic gas) with a minimum capacity of 1 MW (or, to a limited extent, also with a minimum capacity of 0.5 MW) can already receive funding through investment grants since 2021 - with annual subsidies of at least € 40 million - if the plant is used exclusively for the production of renewable gases and exclusively purchases renewable electricity (Sec. 62 par. 1 EAG).
Distribution and transmission system operators may already operate electrolysis installations (under strict conditions) (this has been made legally possible under Sec. 22a of the Electricity Sector and Organisation Act/ElWOG 2010). Furthermore, certain exceptions are also provided for in the context of renewable-sources lump sum funding and, among other things, grid access, grid provision and grid utilisation fees (Sec. 73 par. 1a EAG, Sec. 54 par. 6 and Sec. 55 par. 10 ElWOG 2010, Sec. 73 par. 8 of the Gas Industry Act/GWG 2011).
Otherwise, legal requirements regarding hydrogen - under the GWG 2011, and also in terms of installation or licensing laws - are cursory at best, which is why there is still a high degree of legal uncertainty here.
3 (New) announcements
Additional measures and announcements on the promotion and legally secure regulation of the domestic hydrogen industry were therefore awaited with interest. However, there is little concrete information in the strategy paper. In any event, a new task force consisting of representatives from the relevant ministries is to be set up. Its work is to be supported by the advisory board of a new national hydrogen platform (H2Austria). The BMK (Federal Ministry for Climate Action, Environment, Mobility, Innovation and Technology) is scheduled to monitor the process.
Measures for actual implementation are allocated to various so-called "fields of action". This is where we find information regarding the competitiveness of hydrogen, which is to be increased through the introduction of a renewable gas quota and the future CO2 pricing. There are also plans to simplify approval procedures for hydrogen infrastructure, but the strategy paper remains largely silent about how this will be done.
With regard to infrastructure, thedevelopment of studies, step-by-step plans and roadmaps, which are apparently to be initiated now, is still outstanding. Here, too, various (regulatory) questions have remained completely unanswered. However, the hydrogen tolerance of the gas grid is to be raised to 10% (see also Sec. 133a GWG 2011).
Moreover, "showcase projects for technology demonstration" are to be promoted under a budget of € 125 million for Austria's participation in the first waves of the International Projects of Common European Interest (IPCEI) in the field of hydrogen until 2026.
For industry, incentives are to be created through the "design of a funding instrument to initiate transformation processes" and improved training opportunities for skilled workers. Hydrogen projects can also receive funding within the framework of the "Transformation of the Economy" programme - with a total budget of € 100 million until 2026.
In the area of mobility, hydrogen is to play a greater role, e.g. within the framework of the funding programmes for emission-free buses and commercial vehicles to be launched this year, as well as in public procurement in general, and in research and development, certain focal points will certainly also be followed up on under existing and newly established research programmes.
4. Preliminary conclusion
The new hydrogen strategy paper contains a large number of declarations of intent, but for themost part it does not present much in terms of (legally) concrete information - beyond existing and known instruments. As for Austria as a business location, it is to be hoped that in addition to - undoubtedly important - "intensified" international cooperation and EU-wide coordination, which is given a lot of space in the new strategy paper, the future priorities of Austria and its role in this system will not be relegated to the background. Legal uncertainty has never been conducive to innovation.
If you have any questions on these or any other energy law issuess, the KWR Energy Team is always available to help.