“As much electrification as possible, as much hydrogen as necessary“

To a certain extent. In terms of emissions trading, the EU is on track with its interim targets for 2030. This applies to CO₂ emissions from the energy sector, energy-intensive industry and domestic European air traffic. The same does not apply to other sectors. In transport, buildings and agriculture, the EU needs to step up its game to get to zero by 2050.

In the sectors that are not covered by emissions trading for energy and industry, investment incentives for climate-friendly cars and the modernization of buildings are an important lever. We should link the running costs of vehicles and heating more closely to CO₂ emissions. One possibility for such CO₂ pricing would be a European emissions trading system for petroleum products – which, however, should be set up separately or alongside the existing system.

The key is electricity from renewable energy sources. To be on track for climate neutrality, we need to increase the share of renewable energies in Germany to 70 to 75 percent by 2030. To do this, we must develop the available areas for wind power and solar energy as fully as possible and achieve growth rates like those seen in peak years.

The Renewable Energy Sources Act does not meet the requirements. Admittedly, the amendment that has been passed has certain strengths in renewable power generation for personal usage, for example in the subsidization of solar systems on private roofs. But in other areas of solar energy and wind power, we still have the brakes on. Simpler planning procedures are also an important adjusting screw. We need the next EEG (German Renewable Energy Sources Act) reform by 2022 at the latest to get us on the necessary expansion path.

In economic terms, the cheapest climate-neutral energy source is electricity, which is why it must be expanded the most quickly. Climate-neutral hydrogen will also be a pillar of the energy transition. However, hydrogen will not be cheap in the long term either – because of the conversion losses, the investment costs, and the transport costs for imports. The motto should be: as much electrification as possible, as much hydrogen as necessary.

In the case of passenger cars, we should have the courage to make a clear decision and say: The race has been run, in favor of e-drive propulsion. It makes no sense here to spend money on experiments. The same applies to decentralized building heating: We should not evaporate scarce capital in areas where hydrogen clearly has no future. In other sectors, however, such as trucks, the best solution has not yet been determined. That’s where we need to organize a research process. And then there is a third sector where hydrogen is indispensable. This applies, for example, to the iron and steel sector or the chemical industry.

The often-criticized lack of technology openness is partly a myth. Take the purchase premiums for cars: in Germany, you get the same subsidy for electric vehicles as for fuel cell cars, and both are treated equally in the European fleet limits. The distortion is actually the other way around: in the current EEG amendment, electricity for the production of hydrogen is largely exempted from the levy. That is also correct. But why doesn’t that apply to the electricity used to charge electric cars or for powering heat pumps? This is a bias in favor of hydrogen – even if interested circles claim otherwise.

Yes, in air travel and parts of shipping where there is no alternative. There will always be other small niches. But this is not a path that should be pushed on a large scale. The conversion technologies are too inefficient for that and also too costly in the longer term.

You can set very ambitious targets in terms of standards. But at the end of the day, they also have to fit in with the investment cycles – we’re talking about 12 years for cars, 20 years for steel mills, 30 years for buildings and at least 50 years for infrastructure. That’s hard to reconcile with climate neutrality in 2035. I know that these are painful discussions – but we must not kid ourselves either. We have lost a decade in climate policy – you can’t just make up for that.

We must try to move forward as quickly as possible. One obvious example is the charging infrastructure for e-cars. At least in major cities like Berlin, we are well positioned for today – but there is a lack of charging stations for strong growth. These need to be built quickly. In the case of heating networks, too, the maxim can only be: Expansion, expansion, expansion. At the same time, we need to organize the ramp-up of hydrogen in industry. If a blast furnace in a steel mill is refurbished at great expense, it can’t be corrected after a few years. Or it will be very expensive. In addition, we must promote the exit of CO₂-intensive capital stocks from the market. And we must not forget the social issue.

We come from a system with medium investment costs and high operating costs. Be it cars, power plants or steel mills. In the future, initial costs will dominate – whether for electric cars, wind turbines or a CO₂-free steel mill. Over its lifetime, new technology is usually cost-saving. But how do you deal with people who don’t have the initial investment funds needed to save money over time? This is a problem that has not been dealt with much so far.

In the case of cars, low-cost leasing and rental models can make a contribution. At least in the lower and medium price ranges. Another option: to pay back while charging. This could mean, for example, that I pay back a manageable installment of my car loan every time I charge. At the same time, I could benefit from the fact that electricity is cheaper than gasoline is today. Such models for stretching the cost of capital will be a big topic.