It is Time to Act – Thoughts on the German Strategy

Dear Reader, I would like to present you with some short number examples: The German Callux program installed 474 fuel-cell heating systems within eight years; the original target was 800. Japan currently has over 140,000 of these systems. The German 50 Filling Station program was supposed to set up 50 H2 filling stations until the end of 2015. In the end, there were only 19. Until the middle of 2016, another 23 are said to be added. Meanwhile, Japan has already had 80 of these stations in operation (On a side note, the CEP predecessor, the Verkehrswirtschaftliche Energiestrategie, had envisioned 2,000 public H2 filling stations until 2010).

In the light of such comparisons, the question arises whether German subsidy policies have been sensible and effective. The issue becomes even more delicate when the so-called “success stories” of eight years of Callux are being lauded to the extreme at the program’s final event, but no-one seems to find the time to analyze why progress has been so slow.

Hydrogenics

Of course, the establishment of fuel-cell technology and the implementation of an H2 infrastructure goes beyond statistics alone – after all, Japan has invested much more money into stationary applications (around EUR 600 million compared to a mere EUR 36 million for Callux). And admittedly, the tests under real-life conditions have brought us some of the way forward: Costs were reduced, efficiency was improved and downtimes were minimized. But wouldn’t that have been possible much faster still – despite hardware issues and bureaucratic hurdles? Many difficulties only arose precisely because of the growing delay, as formerly active suppliers first had their patience tried and beyond before they saw the money not coming in, so they turned their backs on fuel-cell technology. This, in turn, led system integrators time and again on a long and tiring search for new suppliers.

Instead of contemplating about measures to speed up development, such as incentive programs or a possibly more sensible taxation of CO2 emissions, both politics and business cling on to the path they chose and laud alleged successes, which reveal themselves as Pyrrhic victories when taking a closer look. For example, Norbert Barthle, Parliamentary State Secretary at the Federal Ministry of Transport, praised the establishment of H2 Mobility as a “great example of collaboration between leading businesses,” although the organization is grappling with severe delays in implementing their schedule: Nine months passed after H2 Mobility was founded until finally the official inauguration date with the minister arrived. No wonder that the timetable for setting up new filling stations is lagging behind as well.

There are numerous examples underlining the less than stellar interest particularly in the transportation sector – but also in the field of stationary units – to actually have state-subsidized products market-ready in a timely fashion. Whereas fuel-cell vehicles especially from German manufacturers have already been technologically advanced enough, their market entry is being delayed again and again. At the same time, the motto for producing electric cars seems to be: no more than the minimum required. The local automotive industry has been benefitting for years from the soft stance toward environmental policies across Europe. Combined with a perfectly set-up network of lobbyists, it means that marketing can advertise green when the “green” is still being earned by fossil fuel technology.

It is more than enough for politicians like Steffen Bilger (I quote: “All in all, I do see that the German automotive industry would like to advance the issue and is putting a lot of effort into it. They, too, will have to comply with the EU-wide CO2 limits despite their large share in the premium segment.”). What the politician from the Christian Democratic Union neglected to add was that it is entirely enough for the carmakers to sell a few electric cars nowadays, since they are being included several times in the calculations for vehicle fleet consumption thanks to the actions of German politicians and because emission limits will only be lowered to a moderate level from 2021 on.

How well a more stringent political framework can function can be seen in California, where the CO2 limits have been set to much lower levels. It shouldn’t come as a surprise that the most electric cars are being sold there as well (e.g., by BMW). It is the reason why Tesla-Chief Elon Musk suggested during his visit to Germany that whereas the state should largely remain absent from the car market, it should create a suitable regulatory framework for it. During his meeting with the Federal Minister for Economic Affairs and Energy, Sigmar Gabriel, he said: “The wish I have is that you price CO2 correctly.”

Even Professor Werner Tillmetz, Chairman of the Center for Solar Energy and Hydrogen Research Baden-Wurttemberg, told H2-international that “Germany has lax regulation.”

Faced with these developments and the statistics mentioned above, it seems more than prudent to explore new avenues in the year that has just begun. Both the carmakers and the federal government must make clear where they stand: The German Chancellor Angela Merkel must finally end her review of “whether and if which” measures are needed to boost the market and fulfill her pledge to present a precise bundle of measures to push the electric car market. A decision has been long overdue – in the end, it is also about whether the agreements reached at the Convention on Climate Change in Paris find their way into the realm of politics and business. Additionally, the automotive industry has to finally present a convincing argument for not repeating last year’s mistakes, again winding up with damage to the environment and a tarnished reputation. No-one needs a second #dieselgate.

Best wishes, Sven Geitmann
Editor of H2-international

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