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INDUSTRY & TRADE

Germany bets on hydrogen to help cut trucking emissions

German firms such as Daimler Truck and Bosch are betting that hydrogen has a role to play in slashing road transport emissions. But the technology has plenty of hurdles to overcome before going mainstream.

Andreas Gorbach, member of the Board of Management of Daimler Truck holding AG poses in front of an Hydrogen prototype GenH2 truck of the Daimler Truck Holding AG in Berlin, on September 26, 2023.
Andreas Gorbach, member of the Board of Management of Daimler Truck holding AG poses in front of an Hydrogen prototype GenH2 truck of the Daimler Truck Holding AG in Berlin, on September 26, 2023. (Photo by John MACDOUGALL / AFP)

Applause rings out as Daimler Truck’s hydrogen-powered, zero-emission lorry crosses the finish line in Berlin after completing a record-breaking 1,047-kilometre (650 mile) journey on a single tank.

But in the race to decarbonise long-haul trucking, the niche technology is still stuck in the slow lane.

The Mercedes-Benz GenH2 truck started its demonstration run at the group’s factory in Woerth am Rhein on Monday afternoon, near the border with France, and arrived in the German capital on Tuesday morning.

The prototype truck made the trip fully loaded on only one fill of liquid hydrogen, similar to what a diesel-powered truck can do.

Unlike planet-warming diesel however, the hydrogen fuel cell technology used in the truck emits only water vapour.

“You’re showing that a heavy load can be transported over a long distance in a sustainable manner,” Petra Dick-Walther, state secretary for economic affairs in Germany’s Rhineland-Palatinate region, said at the departure ceremony.

Germany’s Daimler Truck, one of the world’s biggest truckmakers, said the feat of cracking the 1000-kilometre range marked “another milestone” for hydrogen-powered driving.

But the technology has plenty of hurdles to overcome before going mainstream.

READ ALSO: Germany’s Volkswagen considers job cuts as electric car shift stalls

Hydrogen fuel is produced through water electrolysis but is only considered “green” if the electricity required for the process is obtained from renewables such as wind or solar power.

Hydrogen produced using coal or natural gas is more widely available but less environmentally friendly.

Technical challenges, high costs and a lack of infrastructure have all slowed the advance of clean hydrogen.

German firms such as Daimler Truck and engineering giant Bosch are nevertheless betting that hydrogen has a role to play in slashing road transport emissions, alongside battery-powered electric vehicles.

“To decarbonise transport, we need both,” said Andreas Gorbach, head of technology at Daimler Truck who drove the GenH2 across the finish line himself.

The “sweet spot” for hydrogen trucks lies in particularly demanding long-distance haulage, he said, whereas battery-electric trucks do well on plannable routes with plenty of charging options.

Daimler Truck is aiming for series production of hydrogen trucks in “the second half of the decade”, Gorbach added.

But he said the hydrogen breakthrough will depend on two major factors: the rollout of refuelling stations, and “the availability of green energy at a competitive cost”.

Lagging behind

Under current European Union rules, truckmakers have to cut emissions of new trucks by 30 percent by 2030 compared with 2019 levels.

But European Commission said earlier this year it was eying tougher cuts of 45 percent by 2030 and 90 percent by 2040.

On top of the regulatory pressures, truck manufacturers face growing international competition as the battle to supply zero-emissions trucks heats up.

According to a recent study commissioned by campaign group Transport and Environment (T&E), European truckmakers “could lose 11 percent of the EU market to international electric rivals by 2035” if they don’t go green faster, with the likes of Tesla and China’s BYD snapping at their heels.

American company Nikola, a Bosch customer, has already begun mass production of its hydrogen-powered heavy-duty truck in the United States, benefiting from climate subsidies under President Joe Biden’s Inflation Reduction Act.

In August, Nikola reported a total of 202 orders from 18 customers.

To share out the costs of a hydrogen rollout, Daimler Truck has partnerships with other truckmakers and energy companies such as Shell, Total and BP to install refuelling stations in Europe and the United States.

Bringing down the price tag of expensive hydrogen will be key to its success.

Rainer Mueller-Finkeldei, head of Mercedes-Benz Trucks product development, estimates that the infrastructure will be in place by 2030 and that the total cost of buying and operating hydrogen trucks will eventually be “similar” to diesel trucks.

But according to the campaign group T&E, it could take until 2040 for hydrogen trucks to reach cost parity with diesel.

Both will be more expensive than battery electric trucks by then, its calculations showed.

By Léa PERNELLE

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LABOUR

Far-right threatens to scare off German industry’s new foreign talent

In its search for sorely needed talent, German chipmaker Infineon is looking as far as Guatemala, but the rise of the far-right at home risks making the move unappealing and harming the industry.

Far-right threatens to scare off German industry's new foreign talent

The semiconductor group has plans for a new €5 billion factory in eastern Germany — and it is not the only one. Backed by huge government subsidies, US chipmaker Intel is planning a plant in the city of Magdeburg, while the Taiwanese giant TSMC will put down roots in Dresden.

For all the region’s advantages — a good position in the heart of Europe and an established industrial base — its politics could yet be a drag.

In Saxony, which already hosts the biggest concentration of chipmakers in Europe, the far-right Alternative for Germany (AfD) party is polling over 30 percent ahead of European and regional elections later this year.

Success for the AfD risks “holding back our growth potential”, Frank Bösenberg, the head of regional industry lobby group “Silicon Saxony”, told AFP.

READ ALSO: INTERVIEW – Why racism is prompting a skilled worker exodus from eastern Germany

According to the group’s estimates, chipmakers in Saxony will have 25,000 jobs to fill by 2030, while the local working-age population will shrink by 300,000.

“There are too few young people in the region,” said Bösenberg. “We need immigration.”

However, the anti-immigration politics of the AfD could put off potential recruits and damage the industry.

“A policy of isolation is a threat to prosperity,” Infineon’s CEO Jochen Hanebeck warned on professional social network LinkedIn.

An effort to relocate supply close to home

As it stands, the large majority of the industrial capacity to produce semiconductors — used in everything from electric cars to smartphones — is in Asia.

But recent supply disruptions and rising geopolitical tensions in the region have prompted a rethink in the United States and Europe about depending on imported chips.

The result has been a concerted effort to relocate supply closer to home, leading to a flood of investments into areas like Saxony.

About 68 percent of German managers fear the country could become less attractive to foreign workers if the far-right gains in strength, according to a poll by the IW Köln think tank.

January’s revelations by investigative outfit Correctiv that AfD members discussed a mass deportation plan at a meeting of extremists sparked a wave of protest in Germany.

But companies had been warning well before the controversy that the AfD poses a risk to business.

Stefan Traeger, the head of Jenoptik, a producer of optical components for chipmakers, told German weekly Spiegel in December that if the industry was no longer able to find “the right people”, the impact could be felt on the bottom line.

A lack of workers is ‘the biggest challenge’ 

A lack of suitable workers was “the biggest challenge” facing Germany’s industry, according to Economy Minister Robert Habeck.

The country will need a total of five million extra workers by 2030 to cover the shortfall in all sectors, according to IW Köln.

READ ALSO: How one German company wants to plug the skilled worker gap in green tech

At Infineon’s new factory in Dresden, which should begin production in 2026, the group expects to hire 1,000 new workers.

Foreign workers will be an important “building block” on the way to achieving that target, Tom Geyer, Infineon’s local head of human resources, told AFP.

The group’s workforce in Dresden, who oversee highly automated industrial processes, already has representatives from a few dozen nationalities.

To find the potential new hires and bring them to Germany, Infineon has signed deals with training institutions in Guatemala and is organising language courses and help with housing for new arrivals.

But despite the far-reaching recruitment campaign, “it’s a challenge in a competitive market to find trainees”, said Geyer.

By Florian Cazeres

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