HYDROGEN IMPORT ALLIANCE AUSTRIA
How AMAG is supporting the net zero transformation
Based on the Paris Climate Agreement in December 2015, international climate policy aims to reduce emissions in order to limit the increase in global temperatures to a maximum of 2°C by the middle of the century. This aim underpinned the EU’s decision to set a target of achieving net zero emissions by 2050. Adopted in 2021, the European Climate Law enshrined these emission reduction targets in law and set the overall direction of travel.
In parallel with these legislative developments, AMAG developed an energy supply strategy with the aim of securing access to sufficient quantities of energy at competitive prices. It is intended to be implemented with lasting, long-term effect. The latest issue of AluReport featured detailed reporting on green electricity.
AMAG must also replace its use of natural gas, a fossil fuel, with renewable energy sources. There are several means of achieving this. One option is green hydrogen, produced using renewable energy. The advantages of hydrogen, besides the ability to produce it using renewable, climate-neutral methods, include its ease of transport and storage. Besides determining whether the use of hydrogen is technically feasible for AMAG, it is also important to determine how AMAG might procure or produce hydrogen. Green hydrogen is exclusively produced using renewable energy sources. This means that production relies on renewable power or naturally derived biomass. From 2028, the principle of additionality will take effect, meaning that hydrogen will only be considered renewable if the renewable electricity used in its production is generated from additional power plants rather than existing power plants.
In addition to green hydrogen, other forms of climate-neutral hydrogen - with technologies of different levels of maturity - include hydrogen produced from natural gas with complete carbon capture (blue hydrogen) and hydrogen produced through pyrolysis (turquoise hydrogen). It is worth noting that hydrogen produced using nuclear energy (pink hydrogen) and hydrogen produced from natural gas with nuclear-powered carbon capture (a sub-form of blue hydrogen) are not considered sustainable. Electricity is an essential part of hydrogen production and electrolysers have high power requirements. Due to the lack of available space, insufficient renewable energy generation capacity and a lack of economic viability, covering Austrian hydrogen demand through domestic production alone is not a realistic option. As demand for electricity grows in the course of decarbonization based on technologies including electric cars, heat pumps and so on, it is evident that the primary way to secure green hydrogen at competitive prices will be through imports. In other countries, producing higher quantities of green hydrogen is a viable option due to more favorable meteorological conditions and space availability than in Austria. The same goes for in-house hydrogen production. Consequently, the focus should be on evaluating the procurement situation.
While a small number of hydrogen test facilities have been constructed in Austria, the value chain - from customers to infrastructure to generation - does not yet exist and will have to be established. However, it will only be possible to ramp up the hydrogen industry by synchronizing schedules throughout the value chain. After all, no industrial customers will invest in hydrogen technology for their production activities if hydrogen generation and transport have not also been secured, thereby providing planning certainty and investment security. The same goes for regulatory requirements and competitive pricing. It also applies to the producers, who will only invest in their production technology if they are able to transport their products to their customers. This is, therefore, a classic chicken-and-egg problem.
It seems clear that ramping up the hydrogen market will rely on partnerships. The Hydrogen Import Alliance Austria (HIAA) brings together Austrian energy companies, network operators and hydrogen customers, primarily from industry, and from all stages of the value chain. Members include AMAG Austria Metall, Gas Connect Austria, LAT Nitrogen, OMV, RHI Magnesita, VERBUND, voestalpine and Wiener Stadtwerke. These eight companies account for a significant proportion of current and future hydrogen demand in Austria.Since 2022, the HIAA member companies have addressed an array of issues in a series of work packages. The aim is to make hydrogen imports possible by 2030, thereby helping to achieve climate targets and secure Austria as a location for industry. As a self-organized initiative, the HIAA supports the establishment of an Austrian hydrogen import trade. It has defined the development of domestic hydrogen demand, identified high-priority and promising transport routes to Austria, examined the use of existing infrastructure (i.e. gas pipelines and storage facilities) and defined outstanding regulatory requirements. Ultimately, the Austrian economy will require diversified, pipeline-based hydrogen imports.A key requirement for investment in hydrogen generation and procurement is functional infrastructure. Countries such as the Netherlands and Germany have set an example by committing to building initial and core networks. Investment in hydrogen generation and procurement also requires clarity in terms of transport infrastructure. This starts with appointing a regulatory body and establishing a regulatory framework to enable network operators to make long-term business decisions on investments. The EU Gas Market Package should therefore be transposed into national law as soon as possible. An appropriate legal framework must also be created for hydrogen storage facilities, drawing on regulations on national gas storage facilities in Austria.
HIAA has therefore assumed a supporting role in establishing hydrogen imports in Austria and coordinating the entire hydrogen value chain, from procurement to infrastructure to generation. The activities of the HIAA are contributing to implementation of the Hydrogen Strategy for Austria.
AMAG is committed to European climate targets and works through the HIAA to play an active role in achieving them. This means preparing as effectively as possible for the transformation to a fully green AMAG - and then making this a reality. Access to sufficient volumes of green hydrogen at competitive prices is central to this, especially given its importance as an energy vector in our industry’s high-temperature processes. Replacing natural gas with renewable energy vectors will be the acid test of the transformation to a sustainable industrial enterprise.
