Germany to contribute 1.5 million euros to Thyssenkrupp's Saudi hydrogen plant

FILE PHOTO: Thyssenkrupp's logo is seen outside the elevator test tower in Rottweil, Germany, January 21, 2020. REUTERS/Michaela Rehle

FRANKFURT (Reuters) - Germany will make a 1.5 million euro ($1.83 million) contribution to Thyssenkrupp’s planned hydrogen electrolysis plant in Saudi Arabia, the second commitment this month under a broader national strategy to support hydrogen technology.

Electrolysis is a carbon-free process - if powered by renewable electricity - to extract “green” hydrogen from water, but future German demand for the element as it moves to decarbonise its economy can’t be met domestically.

Aiming to build up partnerships overseas to secure imports, Germany approved in June a 9 billion euro strategy to promote hydrogen initiatives at home and globally.

Thyssenkrupp unit Uhde Chlorine Engineers (TKUCE), part of the group’s Plant Technology division, will supply a 20 megawatt (MW) electrolysis plant, to produce hydrogen from solar and wind power, to the Element One project in the Saudi NEOM business region, Germany’s economy ministry said in a statement on Wednesday.

The multi-billion dollar Helios Green Fuels Project in Saudi Arabia is due to produce 650 tonnes of hydrogen and 3,000 tonnes of ammonia per day from 4 gigawatts (GW) of renewable electricity from 2025.

The ammonia, which is easier to store and transport than gaseous hydrogen, will be shipped overseas for reconverting to hydrogen for use as an alternative fuel in transportation.

Helios also involves Saudi firm ACWA Power, Air Products & Chemicals of the U.S. and Danish chemical catalysis producer Haldor Topsoe.

“The project contributes to building up reliable import capacities and the strategic positioning of German companies in this marketplace of the future,” the ministry said.

Earlier this month, Germany said it would pay 8.2 million euro towards a Siemens hydrogen project in Chile.

Reporting by Vera Eckert, editing by Kirsten Donovan