Hydrogen as part of the mobility energy mix

A not-so-new drive system technology

Fossil fuels are on their way out in the transport sector. Against a backdrop of mandated carbon emission reductions and climate targets, there is an urgent need for resource-efficient mobility. Opinion leaders, politicians and manufacturers have viewed electric battery drive as the main line of development for over ten years now. Hydrogen technology may have taken a back seat, but research into hydrogen combustion and fuel cell engines, their development and series production is not a new phenomenon. The first hydrogen filling station in Germany was opened as early as 2002, by Total. Tellingly, the unit set up by the German federal government in 2008 to bring together projects around alternative drive technologies is called “NOW”: Nationale Organisation Wasserstoff- und Brennstoffzellentechnologie (National Organisation for Hydrogen and Fuel Cell Technology).

Using hydrogen technology helps to avoid certain risks and side effects of battery technology. In addition, it is unwise to put all one’s eggs in one basket – being technology agnostic and allowing technology diversity is the best approach for an agile economy that wants to keep all technical options open. Hydrogen technology is set to take up its desired role in mobility and logistics.

Opportunities

Hydrogen technology has the potential to overcome some of the disadvantages of battery-powered electric vehicles in road use:

• As an energy carrier for fuel cells, hydrogen is available in virtually inexhaustible quantities, while the question of an “unclean” energy source mix does not arise as long as efficient and “clean” methods of producing hydrogen are utilised.
• Refuelling speed is similar to that of conventional fossil fuels, with no need for time-consuming charging processes.
• The high quantities of raw materials and energy required to produce batteries are avoided by hydrogen technology. This eliminates economic dependencies in the production process.
• Due to the higher refuelling speed, it should prove easier to set up a hydrogen refuelling infrastructure in centralised form than to create a decentralised charging point system that necessarily has to be much more granular.

Challenges

As a first step, more companies must come forward to create hydrogen infrastructure and offer hydrogen vehicles on competitive terms, either on their own or through alliances with others. We can advise on all regulatory and contractual aspects of implementing new business models or alliances. Legal relationship management is one of our core roles and competencies.

As is the case with e-mobility, it will be important to continue building acceptance among users and actively working towards that goal. It is likely that this acceptance will be gained earlier for commercial vehicles (goods and passenger transport) than for private transport. Daimler is a good example of this, having moved away from cooperation on developing hydrogen cars to joint ventures for light and heavy trucks.

In the commercial vehicle space, public procurement initiatives could provide a visible signal and avoid subsidies for vehicle sales, which have met with little success to date. We can assist you with legal support around public tenders, supply chain contracts and joint venture agreements. 

Initiatives

Not least with a view to having a more independent and resource-efficient energy supply, the European Union has launched the European Clean Hydrogen Alliance. In addition, more funding for research and development is being made available, such as by the European Commission for the H2ME1 and H2ME2 research projects, which are designed to expand the network of hydrogen filling stations within the EU. We are a competent and proven source for answering any questions you may have here on funding law.

With regard to legal issues around licensing, the agenda for the motor vehicle sector includes the establishment of reliable and internationally applicable technical specifications within the context of the United Economic Commission for Europe (UE/ECE). Harmonisation will play a crucial role in cross-border operability of hydrogen-powered vehicles. Thanks to our long experience of advising on projects involving electric mobility, automated driving and autonomous vehicles, we have excellent contacts to the regulatory authorities and know how to cope with fast-changing conditions in a developing market.

Private and public initiatives must be supported by economically honest pricing of CO2 emissions, which will show fuel cells in a rather different economic light than they may appear today. But even if the competitiveness of H2 solutions is boosted by realistic pricing, H2 mobility projects require substantial investment that needs to be contractually protected.

A crucial factor remains a commitment to a technology-agnostic system mix, with incentives being set in such a way that successfully avoiding carbon emissions is rewarded without specifying or privileging certain technical solutions for achieving that avoidance.

Hydrogen technology is just getting started

More widespread use of hydrogen technology in the mobility and logistics sector is only a matter of time. The first applications are already a reality, with climate change regulations virtually compelling legislators, vehicle manufacturers and hydrogen producers to adopt an innovative, coordinated and ambitious approach to increasing the use of hydrogen in the mobility and logistics sector.

If you have any questions about the legal framework around the use of hydrogen technology in the mobility and logistics sector, please do not hesitate to get in touch with your usual contact at CMS or Dr Gerd Leutner.