Germany Approves Framework for National Hydrogen Pipeline Network

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Germany Approves Framework for National Hydrogen Pipeline Network

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The building of the German Bundesrat in Berlin, Germany (© Shutterstock/aldorado)
The building of the German Bundesrat in Berlin, Germany (© Shutterstock/aldorado)

Germany's upper house of parliament, the Bundesrat, on Friday, April 26, approved an amendment to the Energy Industry Act, paving the way for the construction of a national hydrogen pipeline network.

As reported by Hydrogeninsight, the legislation, now awaiting a formal signature from President Frank-Walter Steinmeier, establishes a regulatory framework for the €20 billion ($21.4 billion) project.

Initially envisioned for completion by 2032, the 9,700-kilometer core network will transport green hydrogen from production sites to industrial centers. 

Following a recent agreement by the ruling coalition, the project's timeline has been extended by five years to 2037, with private investors responsible for building the network, primarily through repurposed gas pipelines. 

The investors will recoup their investments through grid fees, with the government guaranteeing a pre-tax return on equity of approximately 6.7%. 

In the unlikely event that the network fails to achieve its projected utilization, operators will only be liable for 24% of the costs, with the government covering the remainder.

An "amortization account" will be established to manage construction costs, gradually paid back by the operators before 2055. Notably, the Bundesrat did not request any changes to the proposed legislation, expediting its passage.

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