Economy & Jobs
Energy & Environment
By Nikolaus J. Kurmayer | EURACTIV.com
16-03-2022 (updated: 20-03-2022 )
Germany's Robert Habeck is visiting potential gas supplier for Germany, starting with Norway. [EPA-EFE/CLEMENS BILAN]
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Germany’s economy and climate minister Robert Habeck is travelling to Oslo on Wednesday (16 March) to cement the country’s energy partnership with Norway and maximise gas supplies to the continent, including the potential of “blue” hydrogen made from fossil fuels.
It was no coincidence that Germany’s Habeck, minister for economy and climate protection, chose Oslo as his first destination for a series of gas-related trips.
The West’s heavy sanctions imposed on Russia over its invasion of Ukraine has raised fears that Moscow may decide to turn off the gas tap in response. The focus on Norwegian gas also comes in response to the ugly feeling that Europe’s rising energy bills may be financing the Kremlin’s war in Ukraine.
The aim of the trip is to “place German energy imports on a broader footing and ensure the future supply of green hydrogen and associated feedstocks,” according to a statement by Habeck’s economy and climate ministry.
The Nordic country appears willing. The day of Habeck’s visit, the Norwegian petroleum and energy ministry announced the approval of revised production permits at multiple fields in order to “enable high Norwegian gas production,” according to a statement.
Noting that the “field on the Norwegian Continental shelf produce at nearly maximum capacity,” the “government may contribute by facilitating efforts by the companies to maintain the current high level of production,” said Terje Aasland, Norway’s minister of petroleum and energy.
Norway supplies 20-25% of gas consumption in the EU and UK. Norwegian gas is delivered to Europe through an extensive network of subsea pipelines, the ministry adds.
Five Norwegian pipelines land in the EU. Source: Norwegian Petroleum Directorate
Across three pipelines going into Germany, Oslo is able to funnel almost 60bcm of gas per year into the country via Norpipe and Europipe I and II. In comparison, Germany imported more than 70 bcm from Russia in 2021.
Construction of the Danish part of Baltic Pipe, which will connect Poland to Norwegian gas fields, is resuming following a nine month hiatus, Danish grid operator Energinet said on Tuesday.
As Germany is struggling to alleviate its dependence on Russia, Norway appears to be a willing partner. Nonetheless, it has one key economic interest that the newish German government had until now been reluctant to accommodate.
Norway is keen to sell so-called “blue” hydrogen to Germany, a technique involving carbon capture and storage to strip the CO2 emissions associated with hydrogen production from fossil gas.
Norwegian prime minister Jonas Gahr Støre campaigned for blue hydrogen in Germany and for closer bilateral cooperation between the two countries to achieve climate goals during an Energy Round Table in Berlin on 19 January.
Selling blue hydrogen to the continent would allow Norway to continue using its gas reserves in a largely carbon-neutral European gas market. Last year, Norway’s energy giant Equinor announced it would invest almost €12 billion in hydrogen, with a focus on the blue gas-based variety.
The only problem is that Germany has already “disavowed” blue hydrogen, saying it won’t be included in any of the country’s energy subsidy schemes.
The new German government unveiled plans last week to massively increase the ambition of its national hydrogen strategy. There is just one caveat: fossil gas-based hydrogen likely won’t be included in subsidy schemes, despite demands from the oil and gas industry.
Worried about a fossil fuel lock-in effect, the German government is sceptical of gas-based hydrogen, and favours instead the production of “green” hydrogen from renewable electricity.
“We will go for green hydrogen in the long term, and whenever we put money on the table, it will be for green hydrogen,” said Patrick Graichen, German state secretary and Habeck’s right-hand man, during a panel debate with the Norwegian prime minister on 19 January.
But less than two months later, the balance may have tipped in light of Russia’s war in Ukraine.
On Wednesday night, the Norwegian energy industry will host a meeting behind closed doors, during which it will probably try to change Habeck’s mind.
The event is titled “Energy Security and renewed energy partnerships: Action needed to fulfill Norway’s potential as a reliable energy partner to Europe” and will be entirely off the record at the request of the German ministry, a source familiar with the proceedings told EURACTIV.
The main point on the agenda is how best to manage the green transformation of the Norwegian economy while meeting German demand. For Berlin, the key question is “when and how much green hydrogen can Norway deliver” and how much can be expected from Norway’s blue hydrogen projects.
With its vast gas reserves, Norway appears in a strong position. Whether Oslo will be able to sway Germany’s Green vice-chancellor in favour of blue hydrogen remains to be seen.
[Edited by Benjamin Fox and Frédéric Simon]
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