Cop 27: German region says gas prices crimp transition

High energy prices in Europe are hampering the ability of heavy industry to invest in cleaner supply sources, according to policymakers in Germany's most industrialised region.

"The energy and gas crisis in Europe hits us tremendously," North Rhine-Westphalia economy ministry director-general for climate protection Michael Theben said at the UN Cop 27 climate summit. "Industry has to pay two or three times more for energy costs so many of them don't have money now to invest so it's getting even harder."

Theben's warning contrasts with views that the energy crisis would hasten the uptake of hydrogen, as predicted by the IEA in a recent outlook. While higher gas prices make electrolytic hydrogen more competitive and provide an incentive to switch away from gas or gas-derived hydrogen, they also significantly increase operational costs for industrial consumers and hamper their ability to invest in future technologies.

North Rhine-Westphalia would be the world's 18th biggest economy if it were a country. It contributes a fifth of Germany's gross domestic product (GDP) and 29pc of its emissions thanks to manufacturing of chemicals, steel, cement, paper, glass, and lime. These provide employment and secure material supply chains for Germany and the state is determined to decarbonise them rather see them close or leave the region.

North Rhine-Westphalia is looking to hydrogen as one solution and hopes to leverage its extensive gas infrastructure and proximity to North Sea ports to make up the shortfall of its own renewables production capacity. The state will import 90pc of its hydrogen and produce only 10pc domestically, Theben said.

By Aidan Lea