Why backing Germany’s LNG investment is a roadblock – not a bridge to the future

The European Commission’s recent decision to greenlight €40 million in State aid for a new Liquefied Natural Gas (LNG) terminal in Brunsbüttel, Germany is a short-sighted gamble riddled with environmental and legal concerns.

Stéphanie Nieuwbourg is a legal expert at ClientEarth

The terminal is one of 11 new import fossil gas terminals planned along Germany’s coast. The German government has hailed these projects as necessary for energy security and to reduce dependency on Russian gas, thereby justifying significant financial support and short-cuts to kick-start their development.

These types of investments are inaccurately sold as enabling a transition to renewable gases, such as ‘green hydrogen’, which it is argued would prevent a fossil fuel lock-in. The reality is the opposite – experts have stressed that land-based terminals like Brunsbüttel would lead to an overcapacity of gas and that relying on the infrastructure for future hydrogen use is far too uncertain and problematic.

The risk is that this ‘bridge’ becomes a permanent roadblock by maintaining the polluting status quo and locking in the long-term use of fossil gas, while delaying investment and action towards transitioning to renewable energy.

The Commission boasts bold climate goals, yet they failed to uphold them in this instance.

The Commission’s decision to approve spending vast sums of public money in this way sets a worrying precedent for future State aid decisions on fossil gas projects and could influence problematic decisions on hydrogen and lock-in in other EU and national contexts.

‘Hydrogen-ready’: an uncertain and costly gamble

A worrying justification from the Commission for approving the aid is that the Brunsbüttel terminal will be ‘hydrogen-ready’. Under the new EU State aid rules, any new fossil fuel infrastructure project seeking public funding must in principle show that it is hydrogen-ready, meaning that it can be used to import hydrogen or other renewable gases, or otherwise show that it does not create a lock-in of fossil fuels.

Despite not being able to import hydrogen from the outset, Germany claims that the terminal will be able to eventually.

However, converting existing LNG infrastructure to handle hydrogen is complex and expensive. It is unclear how much Germany and the Commission verified that the company has a feasible and technical plan as well as sufficient financing to convert the terminal. Without these, the project will likely remain locked into fossil gas for the foreseeable future.

Either way, the Commission should have attached legally binding conditions and a timeframe for such a conversion to its approval decision. By approving the aid without any conditions, the Commission is blindly trusting the company to follow through with commitments years in the future, without any means of ensuring they happen.

A different approach is needed – one that doesn’t simply ask whether certain projects could theoretically become capable of using hydrogen in the future. Instead, the Commission should meaningfully assess whether the project can and will be converted easily and without significant additional costs.

More crucial questions are whether it makes sense from a cost and environmental perspective to promote infrastructure that supports a massive increase in hydrogen use, and whether it is likely there will be enough supply of, or demand for, hydrogen in 20 years and beyond. In almost all cases, the answer will be no.

Fuelling the climate crisis

The Brunsbüttel terminal will clearly have huge climate impacts. However, the Commission has seemed to glaze over this issue despite the project’s downstream emissions clashing with Germany’s legally binding carbon budget and undermining its own laws.

The terminals listed in the German LNG Acceleration Act may only be used to import fossil gas until 2043. This deadline was enough for the Commission to assume that Brunsbüttel will not create future lock-in of fossil gas. However, simply assuming that a deadline will be met because it is written in the law is naïve.

To prevent lock-in, the Commission must instead effectively assess the risk of targets, in law or otherwise, not being met. If it doesn’t, the Commission is helping condemn Germany and the EU to a high-carbon economy for decades to come.

Germany’s massive build-out of LNG import infrastructure also incentivises others to expand their own gas extraction and export capacities. The additional emissions linked to these projects jeopardises international climate obligations under the Paris Agreement. The Commission has a duty to ensure projects, including Brunsbüttel, do not undermine existing environmental laws.

The urgency of the climate crisis demands bold action. Approving and publicly funding new fossil fuel infrastructure like the Brunsbüttel terminal is out of step with the country’s and the EU’s climate goals.

It is time for the Commission to walk the talk when it comes to climate leadership. This means prioritising clean energy solutions, promoting energy savings and efficiency, and optimising existing infrastructures.

These are the types of projects that will give countries flexibility and autonomy to transition to a clean and more secure energy future with a lower environmental impact. The future of people and our planet depend on it.