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Leg­al framework for approval of hydrogen in­fra­struc­ture

The German government regards hydrogen as the key technology on the path to reaching climate targets by 2030 and achieving zero greenhouse gas emissions by 2050. Secure supply of hydrogen to centres of consumption and the importing and exporting of hydrogen in the European energy market require adequate transport and storage capacities for hydrogen that offer an appropriate level of safety.

As yet, however, the legal framework is underdeveloped and does not allow for full integration of hydrogen into the gas market. The industry is understandably calling for further development of the legal framework to ensure that production, transport and storage of hydrogen can take place on the scale required by energy and climate policy objectives. Politicians have also recognised the need for action. Recently, for example, the Federal State of Lower Saxony submitted a motion for a resolution to the Federal Council (Bundesrat) concerning the creation of a legal framework for a hydrogen economy (Bundesrat Official Document 647/20 of 29.10.2020).

This motion relates in particular to the approval of hydrogen infrastructure, recognising that the creation and expansion of hydrogen networks is fundamental to making hydrogen usable on a larger scale. There are currently also no regulations on the transport and distribution of hydrogen as part of the public energy supply system. Hydrogen networks are not regulated under the Energy Industry Act (EnWG), for example. This means that their approval is not subject to the acceleration provisions included in that legislation and there is no advance effect with regard to expropriation law. Depending on the length and diameter of a pipeline for transporting hydrogen, its construction and operation may require an assessment to be carried out in accordance with the Environmental Impact Assessment Act (Gesetz über die Umweltverträglichkeitsprüfung – UVPG). In such a case, the pipeline is subject to a planning permission procedure with public participation in accordance with section 65 of the UVPG (alternatively, formal planning approval must be obtained). The requirements under substantive law for environment-related projects are high. Especially in the case of large-scale pipeline projects, questions of sectoral planning law, in particular section formation and alternative assessment, arise in this context, in addition to issues relating to environmental impact assessment, national and European laws on protection of nature and wildlife, and water law.

Repurposing of existing gas supply lines is being widely discussed as an alternative to constructing new hydrogen pipelines. Under the current legal framework, the question will regularly arise as to whether a simple change in the operating arrangements of an existing pipeline triggers a requirement to obtain planning permission, including an environmental impact assessment (EIA). The privileging provisions of section 43 f (2) of the EnWG, which exempt a change in operating arrangements from the obligation to conduct an EIA, do not apply to hydrogen pipelines. There are similar issues around the repurposing of natural gas storage facilities to store hydrogen. Here again, the proven regulatory framework for the transportation and storage of natural gas should be updated such that it can also be applied to hydrogen.

There is greater clarity when it comes to hydrogen production. Formal approval proceedings under emission protection law with public participation are usually required for the construction and operation of electrolysers, reformers and carbon capture facilities. It is also necessary to examine on a case-by-case basis whether the facilities exceed the thresholds for a mandatory EIA.

Storage of CO2 is virtually excluded at present by the law on demonstrating permanent storage of carbon dioxide (Carbon Dioxide Storage Act – Kohlendioxid-Speicherungsgesetz, KSpG). Since the purpose of the legislation is initially limited to research, testing and demonstration of technologies, only CO2 storage facilities may be licensed for which an application was submitted to the competent authority by 31 December 2016, in which no more than 1.3 million tonnes of CO2 are stored annually, and subject to a total storage volume in Germany of 4 million tonnes of CO2 per year not being exceeded. Accordingly, the KSpG would first have to be amended to allow CO2 storage.

If you have any questions about hydrogen or the planning and approval of hydrogen production and transport, or the development of the licensing regime, please do not hesitate to get in touch with your usual contact at CMS or Dr Christiane Kappes.