“Hamburg is still in the driving seat when it comes to hydrogen” Interview with the Hydrogen Economy Unit

The Hydrogen Economy Unit of the Ministry of Economic Affairs and Innovation (BWI) connects the heterogeneous stakeholders in the hydrogen ecosystem with the City of Hamburg and supports the development of a local green hydrogen economy. In this interview, the Head of the Unit, Markus Pitz, provides an inside view of its activities.

EEHH: Mr Pitz, Hamburg is the only city in Germany to have set up a specific Hydrogen Economy Unit. Can you explain the background to this?

Markus Pitz: "The establishment of our unit is a very clear signal from the Ministry of Economic Affairs and Innovation (BWI) about the importance of developing a green hydrogen economy for Hamburg. This entirely new economic unit will drive the decarbonisation of our economy, thereby achieving our climate targets. This is a mainstream issue that affects almost every sector of Hamburg’s economy along the entire value chain, e.g. metallurgy, the aviation and maritime economy and heavy goods traffic for logistics companies. In order to best support the economy’s transformation, we haven’t assigned hydrogen to a line manager within the organisation as usual, but have bundled our skills in a unit that was established in October 2020 and reports directly to the Head of the Ministry. This gives stakeholders from business and industry a direct interface to the Senate and politicians, with whom they can discuss their ideas, plans and projects, as well as their needs and concerns. Including myself, the unit currently has eight staff."

EEHH: What is your team’s specific remit?

Markus Pitz: "Our diverse networking activities are a major focus. At a Hamburg level, I’d particularly like to highlight the creation of the hydrogen economy cluster segment within the EEHH Custer Agency in early 2021. Our fascinating remit includes the management and supervision of this cluster and its hydrogen projects, which are still in the process of being set up, as well as our active involvement as a partner of this public-private partnership. The cluster creates an excellent, close-knit network for Hamburg’s hydrogen ecosystem. At a northern German level, we’re working hand-in-hand with our colleagues in the other four northern States and numerous stakeholders from business and science to actively implement our common northern German hydrogen strategy. We’re responsible for supervising the ministerial coordination group, which in turn manages the various areas of activity. In 2021, the Hamburg unit was also the official representative of the northern German States on the National Hydrogen Council, which was a very special experience for me.

Another of the unit’s main activities includes communicating, assisting and supporting outstanding projects in the hydrogen economy, as well as initiating and developing strategic initiatives. An inter-ministerial working group, led by a Head of Department at the Ministry of the Environment, Climate, Energy and Agriculture (BUKEA) and myself, is developing options for the decommissioned coal-fired power plant in Moorburg with the help of an expert. It’s already clear that a large electrolysis plant will be built on the current site."

EEHH: That sounds very exciting, can you give us some specific examples?

Markus Pitz: "There’s already been extensive media coverage of Hamburg’s IPCEI-funded projects, including in this EEHH Cluster Agency blog. The unit manages and supports the entire complex process on behalf of the Ministry, together with BUKEA (local ministry or environment and energy). Another nationally significant project initiated and supported by the unit is the implementation of the so-called ITZ Nord (Innovation and Technology Centre, ‘Hydrogen Technology for Mobility Applications’).  On 2 September 2021, the Federal Ministry for Digital and Transport (BMDV) (formerly the Federal Ministry for Transport and Digital Infrastructure/BMVI) announced that funding of up to EUR 70 million will be available for ITZ Nord until the end of 2024, focussing on aviation and shipping, which will be distributed to the three northern States of Bremen, Stade and Hamburg. ITZ Nord is therefore a flagship project for hydrogen in northern Germany and an example of an efficient, target-focused cooperation between states. ITZ Nord’s service portfolio not only focuses on cooperating with large industrial partners, but is also aimed at SMEs and start-ups, in particular. Its conceptual focus will be on the development and integration of fuel cell systems and corresponding components, hybridisation, refuelling concepts and the bundling of regulatory competences.

Finalising an import strategy for green hydrogen is currently a particular focal point. The background to this is that the growing demand for green hydrogen associated with its market ramp-up cannot conceivably be covered by domestic production, especially in industrial locations with a high need for decarbonisation, such as Hamburg. Which is why it will be vital to import green hydrogen in future. Our aim is to position Hamburg as a ‘Green Hydrogen Hub Europe’ and satisfy local consumers’ enormous demand via imports, while meeting national and European demand as a transit location. Hamburg is ideal for this, thanks to its port, as well as its excellent economic and geographic location and infrastructure.

We’re also increasingly reliant on international partnerships with regions from which hydrogen or its derivates can be imported to Germany via pipelines or by sea. Last year, for example, we concluded appropriate agreements with Scotland and the Dutch town of Groningen. We also support the activities of H2Global, which is making a significant contribution to the launch of international hydrogen trading by using federal funds to temporarily offset the difference between the purchase and sales price for green hydrogen and its derivates. H2Global’s entire operational implementation is managed from Hamburg and the German government’s current coalition agreement provides for the European expansion of the programme – something which we’d like to support."

EEHH: In your view, what were the particular highlights of the past year?

Markus Pitz: "A very clear highlight for the entire unit was the announcement of the German government’s national pre-selection for the IPCEI process, when no less than eight Hamburg project proposals amalgamated into a single collaborative application were confirmed for the European IPCEI funding process – a huge success for Hamburg as a hydrogen location. This collaborative project, which also includes the aforementioned 100 MW electrolyser at the current site of the decommissioned Moorburg coal-fired power plant and the expansion of the pipeline infrastructure, covers the entire hydrogen value chain – including ArcelorMittal, HHLA and Airbus – and is incredibly important for the successful development of the green hydrogen economy and Hamburg’s role as a pioneer.

Our Senate reception in March 2021, organised to mark the establishment of the cluster, was also an emotional and moving event. The enormous interest from the large number of participants, the video message from the First Mayor, Dr Peter Tschentscher, and many other comments created a very special upbeat mood, despite the digital format. I think this was a very important signal for Hamburg’s hydrogen stakeholders."

EEHH: And what are the anticipated challenges and developments for 2022?

Markus Pitz: "The entire hydrogen economy is still being developed, so 2022 will certainly continue to be both exciting and challenging. Germany’s new government will also lend a different dynamic to the development of the hydrogen economy and the expansion of renewable energies. But I’m confident that Hamburg and northern Germany will continue to be in the driving seat when its comes to hydrogen. For example, a fifth area of activity, namely ‘market ramp-up’, will be added to the current four focal areas of northern Germany’s hydrogen strategy in 2022 and will be managed by the unit in future. As a mainstream task, it’s primarily intended to create short and medium-term impetus for business models within an accelerating, self-sustainable hydrogen economy.

Regulation, in particular, will play an important role in the required ramp-up of the green hydrogen economy in 2022. On the one hand, care must be taken to ensure that the additional demand for electricity for hydrogen production doesn’t extend the use of fossil fuels, thereby counteracting our climate targets. While on the other hand, the rapid ramp-up of the hydrogen economy must be supported. The regulatory framework must encourage and support private investment. The required mechanism must also specifically and flexibly support all stages of the transformation process. Overall, therefore, a challenging balancing act is required, which is why we’re also eagerly awaiting the planned delegated act relating to the EU Commission’s RED II Directive.

Our work will also continue to focus on supporting the complex IPCEI process. The selected projects are currently undergoing a European ‘matchmaking’ process, using the EU notification procedure. They will be matched with other projects with similar themes in so-called waves, until the final national application is made. The implementation phase for ITZ Nord will be equally labour-intensive, once the current feasibility study has been completed. We also need to support a number of other location processes, regarding both the production of green hydrogen and investment in other hydrogen-related enterprises. It’s wonderful to see how highly Hamburg is regarded by national and international investors.

And last but not least, I’m also expecting lots of developments in our international networking efforts in 2022, with regard to future import activities. Hamburg has established itself on the international stage as an up-and-coming green hydrogen location and future distribution centre, as reflected by the growing number of enquiries from around the world. We’re looking for additional partners to join our existing network and are currently in contact with other countries and regions, such as Denmark, Iceland, Norway, Tunisia, Egypt, Chile, the United Arab Emirates and the US. As well as cooperation agreements, other specific actions from our import strategy must also be implemented. Pipeline infrastructure, e.g. towards Denmark as part of the HyPerLink III project, will therefore play an important strategic role for Hamburg and Schleswig-Holstein. It’s particularly important to initiate the implementation of such long-term projects as soon as possible."

About Markus Pitz:

Markus Pitz is a lawyer and has headed up the Hydrogen Economy Unit since it was established in October 2020. His previous career with the Free and Hanseatic City of Hamburg was extremely varied: after three years as Coordination Advisor for the Airbus factory expansion at the Ministry of Economic Affairs, he headed up the Public Theatres Unit at the Ministry of Culture, before returning to the Ministry of Economic Affairs to manage the Aviation Unit and Legal Unit for Central Administration, as well as the Department of Agriculture and Plant Protection Authority. As well as his current unit role, Mr Pitz also continues to be responsible for the Plant Protection Department, as well as the new Hamburg Food Cluster and Wholesale Market Agency.