Feb. 1, 2023

Ep115: Jorgo Chatzimarkakis "Europe's Hydrogen Pusher"

This week, Michael invites Jorgo Chatzimarkakis, CEO of Hydrogen Europe, to debate the importance of hydrogen in powering Europe and the world towards a decarbonized economy.

Hydrogen Europe is an industry association of more than 400 members that promotes the role of hydrogen in reaching carbon neutrality in Europe. Chatzimarkakis holds hydrogen to be the miracle molecule of the transition, while Michael’s Hydrogen Ladder has a far narrower view of its likely uses on the path to net zero.

What follows is a comprehensive, robust – and at moments, fierce - discussion of hydrogen in the transition, covering electrolyzers, fertilizers, freight, transportation and heating, as well as following the “pots of money” behind hydrogen infrastructure and lobbying in Europe.

Spark more healthy debate around net zero pathways by liking and sharing the episode, and don’t forget to subscribe.

Guest Bio

Chatzimarkakis was a Member of European Parliament from 2004 until 2014 for Germany’s Free Democratic Party (FDP), serving on the Committee on Industry, Research and Energy among others. From 1999 to 2004, Chatzimarkakis was Managing Partner at Polit Data Concept, a public affair consultancy, and served as a Science Policy Officer at Germany’s Bundestag from 1995 to 1998.

Chatzimarkakis holds an MA from the University of Bonn in Political Science. He has held positions as a lecturer at University Duisberg Essen and Saarland University.


This week, Michael invites Jorgo Chatzimarkakis, CEO of Hydrogen Europe, to debate the importance of hydrogen in powering Europe and the world towards a decarbonized economy. 

Hydrogen Europe is an industry association of more than 400 members that promotes the role of hydrogen in reaching carbon neutrality in Europe. Chatzimarkakis holds hydrogen to be the miracle molecule of the transition, while Michael’s Hydrogen Ladder has a far narrower view of its likely uses on the path to net zero. 

What follows is a comprehensive, robust – and at moments, fierce - discussion of hydrogen in the transition, covering electrolyzers, fertilizers, freight, transportation and heating, as well as following the “pots of money” behind hydrogen infrastructure and lobbying in Europe. 

Spark more healthy debate around net zero pathways by liking and sharing the episode, and don’t forget to subscribe. 

Relevant Guest & Topic Links: 

Learn more about Hydrogen Europe: https://hydrogeneurope.eu/ 

HE’s Hydrogen Act (2021) lays out a roadmap for a ‘European Hydrogen Economy’: https://hydrogeneurope.eu/wp-content/uploads/2021/11/2021.04_HE_Hydrogen-Act_Final.pdf 

HE’s Clean Hydrogen Monitor (2022) provides an overview of the European hydrogen market: https://hydrogeneurope.eu/clean-hydrogen-monitor2022/ 

Explore Michael’s Hydrogen Ladder here: https://www.linkedin.com/pulse/clean-hydrogen-ladder-v40-michael-liebreich/ 

President von der Leyen’s speech at the European Parliament Plenary on December 15th 2022: https://ec.europa.eu/commission/presscorner/detail/fi/speech_22_7727 

Watch Cleaning Up Episode 111 with Dan Yergin here: https://www.cleaningup.live/ep111-daniel-yergin-the-worlds-most-influential-energy-analyst/ 

Watch Episode 88 with Patrick Graichen here: https://www.cleaningup.live/ep88-patrick-graichen-germanys-secretary-of-state-for-the-energiewende/ 

Guest Bio:

Chatzimarkakis was a Member of European Parliament from 2004 until 2014 for Germany’s Free Democratic Party (FDP), serving on the Committee on Industry, Research and Energy among others. From 1999 to 2004, Chatzimarkakis was Managing Partner at Polit Data Concept, a public affair consultancy, and served as a Science Policy Officer at Germany’s Bundestag from 1995 to 1998. Chatzimarkakis holds an MA from the University of Bonn in Political Science. He has held positions as a lecturer at University Duisberg Essen and Saarland University.

Transcript

Michael Liebreich Jorgo, welcome to Cleaning Up.

Jorgo Chatzimarkakis Many thanks for the invitation, it's an honour to be here.

ML Thank you so much for joining us, and spending some time with us here today. So, you are the CEO of Hydrogen Europe. And what I want to do, if I might, I do this with all of our guests, is ask you, in your own words, to describe what is Hydrogen Europe? If I do it, I'll put words in your mouth and I won't get it right. So, what is Hydrogen Europe?

JC It's an association, it has been created basically, and initially, to cover innovation in hydrogen some, well, 20 years ago overall. So, industry needed to put their strategies together when it comes to innovative projects, that's why it was created. And in 2016, they discovered it's not enough, we need to do advocacy. I entered the Hydrogen Europe association right then, so after my time in politics. And well, we created then an advocacy, we created something like an association that has to shape a sector, a sector that does not exist, in industry terms. It existed only in B2B and in research, and that's it - or innovation. And today we are an association having corporate members - 80% of our members are corporate members - ranging from Airbus to Vattenfall, so really, users of hydrogen, but also transmitters and producers, mainly. And then we have national associations, because in many, many member states of the EU, you have the same as Hydrogen Europe, based on a national ground. And we have regions. That's interesting, because regions become the place where it happens, where, so to say, the narrative needs to be put into practice. And we have politicians from regions then in our membership, so the governors, the policymakers. Overall, we are now 440 members, still growing. There's a rumour that we stopped taking new members - wrong. We are accepting new members. And it has become quite big over the last five, six years.

ML Thank you very much for that. And particularly, I'm fascinated by the regions that are members. Roughly how many regions do you have?

JC Yeah, it's in the meanwhile, already 35, 37 regions. Interestingly, it's mainly French and Spanish regions. I'm saying interestingly, because France was one of the countries, until yesterday... So, over the weekend, there was a big event, Franco-German event. But until yesterday, France was a little bit hesitant when it comes to hydrogen and renewable hydrogen, because they have, of course, a different angle with nuclear power. And all of the French regions, except two, are members of Hydrogen Europe, so that makes quite a lot of them. And now we're starting - Spanish also, I think a handful - and now we're starting all over Europe to have regions. We always work with peers. So, there are regions that go ahead, that are the spearhead of something. And that's how we work in industries, but also in member states. And then you have this jealousy, the others say, oh, why is Western France there, and why are not we? And yeah, and then they join.

ML But just to be clear, these are regions, they are not hydrogen valleys, or hydrogen hubs specifically? Because that's what I'm finding fascinating.

JC So, it's regions. Because we need also public support. We need licensing, where regions have a say, and money. But the valley concept, the hydrogen valleys are closely connected, of course, to the regions, because most of these valleys then need the cooperation of these policymakers over there. And they are, in most of the cases -I think, in all of the cases - cross-country. So, it's regions from different member states that cooperate and create a valley.

ML And you say you need money. Can you clarify, is that you need money as Hydrogen Europe? I mean, my impression is that you've got plenty of money, you're spending very liberally. Or did you mean money for the hydrogen sector?

JC We are not-for-profit as Hydrogen Europe. So, plenty of money, we take money from basically from the membership fees. That's it, we have no on-top money. Plus, we have organized last year, for the first time, the so-called Hydrogen Week. It's an exhibition and a fair, and also a high-level conference, and a B2B conference, three elements. That went for the first time very, very well; it might be a source of income in the future, we will see. However, money is needed for the projects as such. If you see, the German vice-minister and Norwegian Prime Minister met the second week of this year, to talk about a pipeline between Norway and Germany, big projects. This needs to be implemented in the corresponding regions. And there we need, of course, public funding for the infrastructure, for certain elements that are there to bring them together. So, that's the money I meant. And of course, private money does already follow, it's waiting. But you need both you need public and private money.

ML Okay, now, this whole area of industry, but also, it's deeply entwined with the policy and the regulations... And I would say you've been incredibly successful: Hydrogen Europe is really embedded very deeply in - particularly at the EU level - in that policy environment. It's really mystifying as an outsider, you know, you have the joint, what is it... If I start with the whole... You've got the [Clean Hydrogen Joint Undertaking], and then it evolved into the Clean Hydrogen Partnership and you've got... Can you talk us through the various runners and riders? Which organizations should people care about? Which are the important ones? How did they get there? And then we'll come back and talk about the specific regulations: FitFor55 Hydrogen Strategy, and so on. So, who are the players?

JC Well, you mentioned just the Joint Undertaking, which is basically a technology platform.

ML That's right, I found my note here, the Clean Hydrogen Joint Undertaking.

JC Exactly. And that has two predecessors, it's always for seven years. And I had the honour - I mean, you'll know that I have been in politics before - I had the honour, when I entered Parliament, the European Parliament, to vote upon the first Joint Undertaking, that was called a Fuel Cell and Hydrogen Joint Undertaking, and that lasted for two times seven years, with... First it was €500 million, then it was €800 million, now we are endowed with more than a €1 billion. And this is just - "just" - research innovation projects. So, as we need in any new technologies, plenty of plenty of innovation, this is a project under the research policy of the European Union. And it worked out, because it's a hybrid thing.

ML There's going to be lots of numbers flying around millions, billions, pretty soon, maybe even some trillions, right? Pretty soon we're talking real money. But that €500, €800, and then €1 billion, those are over seven-year framework periods? That's not every year, is that right?

JC Not every year. First framework, seven years, 500. And at the moment, we have started the third period. Not sure whether we will see a fourth one, because now we are in [the] implementing phase, now we are in the industrial scale; we don't need anymore to focus only on research and innovation. However, what we took out of it, was that we can see the implementation of concrete hydrogen projects in different areas. So, is it the energy system to have, so to say, a balancing role in grids? Is it transport and mobility? Buses, we have been quite successful in buses there. Is it heating? There also hydrogen projects took place all over Europe. And this is the joint undertaking that is today called the Clean Hydrogen Partnership.

JC Well, it was very, very French, before all along the years. The point here is the Clean Hydrogen Partnership is the successor, they simply changed the name. It's interesting, because it was called before the Fuel Cell Hydrogen Joint Undertaking, and that was quite a niche. Because fuel cell only is important, but it's a niche. And so, the new name - the Clean Hydrogen Partnership - shows that hydrogen is now being seen all over the sectors.

ML That was my next question, was, okay, so if that's the joint undertaking, who is the Clean Hydrogen Partnership - chaired by Melissa Verykios, it seems like there's a slight Greek theme going on here...

ML So next question, then: who is the European Clean Hydrogen Alliance?

JC That's interesting, because when the European Commission decided to have a hydrogen strategy - that was in July 2020 - they said, in order to kick start something like a hydrogen sector in Europe, to implement this European hydrogen strategy, we need to bring together the industry, civil society and political decision makers. And that's why the Clean Hydrogen Alliance was nothing else than six round tables, representing the six parts of the hydrogen ecosystem: production, the transport of hydrogen, and then the use of hydrogen in buildings, and heating, in energy systems, in transport, and industry and these six roundtables...

ML If I'm right, that goes beyond research? So, if we go from the Joint Undertaking to the Clean Hydrogen Partnership, that's mainly research, and now we're talking about broadening it to other players, is that correct?

JC That's broadening it, that's defining standards, that's having a project pipeline. So mainly, the European Commission, together with us; I mean, we helped a lot, but also six other associations did help. We invited them, we were asked by the commission, who would be the best to do it? So, wind is in, and solar is in, chemical industry is in, ACEA, the European Cars Association, they are all in there, they run their roundtables. And what the commission wants is to have possibly a list of problems - political problems - that they need to overcome, and a project pipeline; that's how they call it. And the list of hurdles - political hurdles - is not needed anymore, because the regulation has come: FitFor55, we will discuss about that, is a big array of different measures. So, we don't need that anymore. The Clean Hydrogen Alliance now is really focusing on networking and creating concrete projects to be implemented.

ML Great. Now, you also have these things called Important Projects of Common European Interest, right, the IPCEIs? And what are they? And who is the keeper of that list?

JC Well, the IPCEIs are basically a methodology to waive state-aid rules. So, at the moment, you have some very serious state-aid rules - you cannot just fund, as Austria, your hydrogen industry, or your battery industry. You need to have an exception if you do it. These exceptions are based on quite cumbersome rules. And the IPCEIs, they define projects that are given the green light, that member states can waive these state-aid rules. So basically - it's trans-national, so it needs to be many, many countries involved - and so far, we have two waves of IPCEIs that have been issued. And by the way, the sheer volume already is bigger than the IPCEI on batteries and the IPCEI on micro-electronics. That shows that the European industry was so keen on running for these projects, getting money from their own governments. And that's where we are, it's €10.6 billion, let's say more than €10 billion, that have been issued by national governments for these projects.

ML So, these have been designated those projects. Have they all received funding?

JC They start to receive funding.

ML Okay, and who's the keeper of the list? My question: who decides, yes, you're an IPCEI, you're not an IPCEI?

JC Mrs. Vestager. That's the vice-president of the European Commission, our Danish competition commissioner. And she is the one going through the list, and then saying [rubber stamp], and then it goes back to Vienna, Paris, Berlin, or Athens, Madrid. And then the capitals say, okay, we got the green light. And then it's up to them to really fund it.

ML Now, we're moving up the scale, we've gotten to the €10.6 billion, we started with the first framework, the Joint Undertaking was €500 million, now we're at €10.6 billion. But the numbers keep going: the Hydrogen Strategy was €430 billion. Is that correct?

JC That is correct. That would be the overall investment until 2030. Overall investment, but of private and public players. So, it's not just public money.

ML That's EU money, state money and private money, correct?

JC Correct. Absolutely correct. So basically, the public money normally goes into the infrastructures. But we have here the problem of the chicken and egg dilemma. That is, in every new technology that has a bigger role to play, an enabling role to play, yeah, you need to invest; you change the courses, and once you change the course, profitability will follow. But this changing, of course, that costs money. And that costs also public money, and private follows immediately after they see, aha, course goes into that direction, so let's go with private money.

ML Can you just give us a sketch of what the Hydrogen Strategy included? Because I did quite a big deep-dive, and at the time - this was 2020 - a lot of it was on the production side, and some of the distribution, but it was quite hazy about the use cases, if I'm correct? So, that €430 million is really only... it's the renewable energy, and the electrolyzers to produce hydrogen, and some pipeworks and distribution infrastructure. And then it kind of says: on the demand side, we will clarify. I'm paraphrasing, from my perspective, is that fair?

JC Well, what is fair, is to say that the sheer amount of electrolyzer capacity was at the forefront of this strategy. So, the European Union understood - that was in early 2020, when the pandemic broke out - we need a blueprint to overcome the threat for the European Green Deal concept caused by the pandemic. We all remember: supply chains were interrupted; people didn't know, will we have an industry the [next] day? And that is why the European Commission was so interested in understanding, what can we do, in order to give an impulse to people investing into renewables - because the appetite dramatically went down - to invest into renewables, and to... well, to keep industry in Europe. And that is where they discovered the 2x 40 gigawatt electrolyzer initiative that Hydrogen Europe had... drafted. And, of course, we got asked whether we would be interested in working with the Commission, and they went through all the figures, and we explained, yes, this is not just a fantasy; we have a whole bunch of industrial partners who would underpin this, and... they signed up to this. And then the Commission said, this seems to be real. They, after three months only, presented the strategy, and you will find the 2x times 40 gigawatt enshrined in that strategy. And indeed, it talks also about use cases, but it tries to... to be fluffy there. Why? Because with the European Clean Hydrogen Alliance - we talked about that, the six roundtables - they wanted to understand, how concrete is that? Which roundtable is most promising? Of course, industrial use cases are very promising, [which is not.] And this is why they were a little bit less concrete at that stage, but later on, due to other circumstances, especially the aggression of Russia in Ukraine, caused then another jump to next levels of hydrogen production.

ML So, the European Hydrogen Strategy, you talked about the 2x 40. Can you... where I'm going here, is I'm trying to give an understanding of the scale to the audience, but also a little bit of the history, so I'm doing two things at once. But the 2x 40: so, this is 40 gigawatts of electrolysis in Europe, and 40 in the near surrounds where European countries could import. And the goal is, if I'm right, 10 million tonnes of hydrogen made in Europe, and 10 million imported. And that was in the strategy, and has survived into the packages since, correct?

JC Not yet. So, in the strategy with the 2x 40 gigawatt, they wouldn't yield the 10 million tonnes domestically; that came later with RePowerEU, that came then [in] 2022 But the 2x 40, just to give this history, were already quite ambitious. So, it's already, at that time, it was ambitious. But the Commission checked, and said okay, who is leading globally in the electrolyzer industry? At that time, it was definitely Europe. And then they say, [this] makes sense. It's also a good booster for the European industry, and later on we came then, with the Russian aggression, to the 10 million tonnes. Because 10 million tonnes is much more electrolyzer; that's a capacity of... 130 gigawatt electrolyzer capacity. So, that's more - 2x 40 is only 80. But you're right, it was divided into domestic production, and into imported hydrogen. So, neighborhood. And basically, we had written the paper - funnily enough - with the Ukrainians at that time. So, in 2019, we started to talk to the Ukrainians and to the whole MENA region - Morocco, Algeria, and also the Gulf region, the whole MENA - and they were all involved in that 40 gigawatt to be imported. And that was the basis, we started quite early. So, it doesn't come as a surprise for them that we expect them to produce a lot of hydrogen. Well, we know what happened in Ukraine. So, the plans there are continued, but of course, need to be... Well, the renewable infrastructure has been destroyed, most of it, in Ukraine, so we need to have a recovery plan. In the MENA region, plans are going really full speed; especially in the Gulf area, we see announcements and concrete projects every week. So, it really was worth working with our partners there, and having the European Union being an anchor for this strategy, and now for the implementation. And the history: I was watching one of your talks with Daniel Yergin, who is the big historian. And basically - I'm fascinated by his book - and basically he asked you, as far as I remember, how can you explain that hydrogen has suddenly come up? So, it's not the money. It's not the money. So, if you look at how much money we spent, or the Hydrogen Council or others spent, you won't - if you really dig deep - you won't find a lot of money there. It's a compelling narrative, and the urgent need to, well, respond to climate urgencies, and that's how it how it came.

ML Right? I mean, just on that number: there is a number out there for that amount. There is a think tank that tried to add up all the hydrogen lobbying in 2020, and came up with a figure of €58.6 million euros spent by the industry in Brussels in 2020.

JC Can I say clearly here, that we asked this think tank to give us the proof. What they simply did is, they added all oil and gas lobbying money - and we are not oil and gas, we are hydrogen - they simply added that. And I was the first one in Brussels, and I said openly and clearly, to ask them via press release, where did you get the figures from? Come here, show us. If not, we might go to court. We never got an answer. But it's much more quiet now, because it's really... I'm a little bit, to be honest, I'm a little bit fed up with these announcements, and no proof of the pudding. So no, it was just a compelling narrative. And we worked hard. It's not easy to bring all this industry together to calculate what is possible, what [is] not. So, it was hard work, to be honest, and we were pretty much working as a startup. When I started in 2016 at Hydrogen Europe, I was one, I was one employee, and now we are 45. So, you know, Michael...

ML I do love founder stories. I mean... in other environments, I work quite hard on trying to get transparency. I mean, the easy way around these conversations is just to publish your accounts.

JC We can publish our accounts.

ML Let's come back, because that's not the direction I wanted to go, although I think we would welcome that transparency. But I want to just suggest, let's speed up a little bit on the legislation, because we haven't got [to] FitFor55 and, and RePowerEU. And the question I guess is: to what extent did they then ratchet up and add more of the funding, or is it really just fleshing out the hydrogen strategy?

JC Well, on one hand, it was fleshing out. I mean, we all remember, there was a war [that] broke out that nobody really expected at that time. And then there was quite a fast reaction by policymakers all over the European Union, and the European Commission came up with this RePowerEU - a quite intensive compound of ideas. And there, this 10 million tonnes were mentioned already; the 10 million tonnes, which is, as I said, much more than the 2x 40. And money was not the point back then, that came later; that came only when the European Commission President said she would create a Hydrogen Bank, and then she mentioned a new figure. But before that, we never heard about figures. What we know, of course, is that existing funding schemes, like the Recovery and Resilience Fund, like all the money that is spent in different industrial areas, is also available for us. But you have to qualify - like the IPCEI - you need to qualify, and that's, again, hard work, but we do that. The first figure that came with hydrogen was the €3 billion connected with the Hydrogen Bank. But to be honest, it's not fresh money either. It was said that this comes from the ETS Innovation Fund, so, existing Emission Trading Scheme money. However, I have the impression that the Commission President now, with her speech in Davos, went one step further, because she mentioned the Sovereignty Fund. [The] Sovereignty Fund is new. It is not that new, because with the pandemic, we already started to see that the European Union is borrowing money - that was not the case before - but this was strictly for the pandemic. Now, she starts to explore the idea of having a Sovereignty Fund methodology also used for clean tech. And she mentioned always different clean techs in her speech, I think she mentioned five, which is wind, solar heat pumps, clean hydrogen and storage. So, all these five technologies will have access to [the] Sovereignty Fund.

ML The sovereignty angle is presumably about energy resilience? It's about saying we as, as the EU, have a legitimate interest in organizing, and also therefore funding, sovereignty in the sense of resilience, so, securing supply.

JC Absolutely, and if we analyze her speech that she made in Davos it's quite remarkable. Because we are missing a real industrial policy in Europe. Reason being, countries like Germany always said, no, no, we don't want industrial [policy], the Nordic countries; the UK had always a very, very strong anti-industrial policy drive. It was mainly the French, who had a clear industrial policy angle. I have the impression - and if you read her speech, or listen to her speech - that she grasped that French angle now, and put it forward. And I have to say, I'm happy about it. I'm happy about it because   we need to kick-jump, if we really want to go clean tech; she doesn't mention hydrogen only - again, I said these five clean technologies - because she sees ourselves Europeans squeezed into a situation where we all started... It's like always: we start solar; we start fax machines; and we end up in not implementing and being dependent on other geographies. At the moment, it's mainly China that we need in order to get components, and to get whatever we need for clean tech, and that's what she wants to avoid, and this is remarkable. It's a change of the European Commission angle, and it's more French, but nothing against it. I think it's the right reaction to the Inflation Reduction Act, and to all the other schemes throughout the globe on hydrogen, and not only [hydrogen].

ML Let me just unpick that, because you just came in at the end and you mentioned the Inflation Reduction Act in the US. And that is because, when I asked you about why is it sovereignty, that would be, okay, energy resilience, and securing supply. But your response makes it clear that really, at least in your view, it's more about classical industrial strategy - owning the technologies, owning the manufacturing, owning the supply chains - because otherwise, they'll either go to China, or to the US. And the Inflation Reduction Act, the IRA, is... We had, by the way, an excellent episode with Ion Yadigaroglu and Dipender Saluja of Capricorn Investment Group, who support the podcast, talking about how simple it is; simply, you do x, and you get y money. And that's so simple, compared to you know: we are 25 minutes in, and we're still, there's all kinds of this organization and that organization... I'm trying to work out where are the big pots of money? In the EU, from the EU or not? And it's hard.... So, this is something I hear from my clients, my network, that the problem with the EU is not that they don't talk about stuff and push through regulation. But it takes five years, and it's still unclear where the money comes from.

JC You're absolutely right, and this is something we criticize every single day. I mean, we are happy about the speed the EU came up with the strategy, and then the corresponding FitFor55 proposals. However, if you try to get this money, you will have a hard time. I was asked by one of my members, COs, [he] said, hey, the IRA is so simple, can't you just put the European counterpart next to it? And I said, no, I can't, I possibly can't, because they have so many different schemes that depend where you are, which country, which region, and so on, so forth. And this is what we criticize, and this is where I think Mrs. von der Leyen - so the Commission President, and that's why I'm repeating it now - really, really changed the way the European Union wants to tackle this. She calls it the Clean Tech Act, or the Net Zero act, and she's absolutely right: you cannot be the first continent being climate neutral, without a clear industrial policy. And you mentioned several arguments to be sovereign. One we need to add, that's the CRMs: that's the critical raw material. That's, so to say, the access to minerals, to rare earths, and the possibility, or the ability, to get them... Well, even from recycled things, or to replace them. And this is so important, and this is why many of us look into hydrogen, because they understand it's much less critical raw material-related than other technologies. That's what they like.

ML Let me just push a little bit on this question of scale and money, via the Hydrogen Bank, the €3 billion that you mentioned, that's really on the table, working its way through the sausage machine in Brussels. So, you've got this aspiration, €430 billion that's supposed to flow - you've got €3 billion. So, first, a priori, it's two orders of magnitude smaller. But what it's really going to do, is it's going to buy hydrogen - clean hydrogen from whoever can make it - and then it's going to have an auction to purchase, and then an auction to distribute to whoever, to the users. And supposing that clean hydrogen costs - let's just be super optimistic - let's say it costs €1, more than grey or dirty hydrogen. €3 billion, gives you 3 million tonnes - that's it. Now Europe is using - I don't know what the number is - already, it's using something like 15 million tonnes, 12, 15 million tonnes of grey hydrogen every year. So, let's say over five years that the bank will do this, it will clean up 3 million. I mean, it's just the wrong... It is two orders of magnitude too small, is it not?

JC Well, first of all, when it comes to the price, we have in some blessed regions in Europe already a price for one kilo of green hydrogen of €2.2 to €2.9, last year.

ML Which is €1 higher than grey hydrogen.

JC Grey hydrogen was because of the gas price, €2.65... [inaudible]. So, we cut this ratio, so it was good. However, you're absolutely right, €3 billion is nothing, if it's not per year. That's, dear Michael, how I understood it. So, she said Hydrogen Bank, €3 billion, she didn't say when. So, for us, we interpreted per year, because that's exactly what we need. You're smiling...

ML I'm smiling because since 2016, essentially, you've been giving dictation, and it seems to me like Europe, the EU policy machine, writes down what you say and kind of tries to do it. So. if you say €3 billion per year, I guess we should expect €3 billion per year.

JC Well... that's very flattering. Of course, you know it's not true. But yes, we need to discuss with them. And that's the good thing about this new sector. Basically, we need the experience of our members. And as we have so many members who are everyday dealing with hydrogen and the implementation, the commission is, of course, listening to us; but they are also listening to others. So, it's not 100% of what Hydrogen Europe says, will be enshrined in law, not at all. We have hard negotiations with a lot of people, and sometimes we also are disappointed. But of course, since this is new, we need to put all our experience and hard facts together. I'm very proud of my intelligence unit, because they are really milking - so to say - the data, and that's what we come out with, €3 billion per year, yes.

ML Right. I want to move on to where all of this hydrogen is going to go. And currently, Europe is using something of the order of 12 to 15 million tonnes; and the reason it's moving around is of course, because of the cost of gas. Things are actually... fertilizer plants are being shut, and it could even go down below that. But that is overwhelmingly, currently, grey hydrogen. So right now, for all of the good talk and the whatever and the intelligence unit and the technology, about half a percent of the world's hydrogen is green. The overwhelming majority is grey from natural gas, or even black, from coal, in some parts of the world. And, you know, a cynic would say - I'm not saying me, I'm saying a cynic would say - why are we talking about anything here, anything at all, other than greening the existing use of hydrogen, which is, if you map it onto my hydrogen ladder, the top row: fertilizers, petrochemicals. Why are you not spending 100% of your time on that?

JC We are spending, maybe more than 50% of our time on that. Because you're absolutely right, and you have hit the right point; that's the low hanging fruit, to convert the existing grey hydrogen. And I'm very open here, one kilo of hydrogen - ten kilos, nine to tens kilos of CO2? That's bad! And here, we can abate, immediately, a lot of CO2 by just replacing that. And we are fighting hard, Michael, in the current legislation for an obligatory character of this industrially-used hydrogen to be replaced. So, basically, in RePowerEU - in FitFor55, added via RePowerEU - the commission has come up with a proposal that 50% needs to be green until 2030; that's roughly four and a half million tonnes. That's cool, because if you oblige the industry to replace that, you have a level playing field for everybody; and fertilizers, chemical industry, petrochemical industry and steel industry will be the first - well, to be obliged, and then - to create demand, and hence, to overcome the chicken and egg dilemma. So, that's four and a half million tonnes, as of 2030, per year. But we have also other targets. We have the target in the so-called renewable fuel of non-biological origin part. So, that's fuels that can be produced, if it's non-biological, from hydrogen - hydrogen and the so-called derivatives. And that's another target that you'll find: 5.7% of all fuels in 2030 should be so-called RFNBOs, so renewable fuels of non-biological origin; mainly shipping, and aviation, although the sub-targets are very, very low. So, there's a big overlap, that gives us the possibility to also put it into trains and trucks. And as we see already, the demand is so enormously big, of big logistical companies to purchase these trucks, we see that we need another obligatory target here. So, if you oblige the producers of fuels to have this 5.7, you have another 4.5 - 5 million tonnes, overall, that makes up 10 million tonnes. That's the 10 million tonnes we talked about, possibly domestically produced. It will be a mix, there will also be imports. And there you go, you have targets.

ML Right. But let's look at the scale of this, because I want to come back to mobility and trucks and so on. But I'm very familiar, I've done the numbers at the global level, and Europe will not be very different, which is the top row of my hydrogen ladder, if you just wanted to do that with clean hydrogen, and you just, for the sake of argument, wanted to do it with green, clean hydrogen - so, renewable energy - that would require one and a half times all the wind and solar ever installed to date - just the top row. So, that's just fertilizers and petrochemicals. Now, if you start adding steel, you add aviation, shipping, and you add long-duration storage - so things that I think you and I can agree, it's gonna be hard to do without any hydrogen - you add that, and you're now at five and a half times all the wind and solar ever, ever installed in the world. So, this raises two questions, and let's take them in order. The one question will be about additionality. And the other question is, why bother talking about anything below those top two rows, because there simply won't be the green hydrogen? So, I mean, maybe the reason to talk about the things down below is because what you really want is blue hydrogen. But I think we need to talk about those two things. Additionality: how do you green the power system with the renewables that we want to build, and at the same time add demand that could be five times as much as all wind and solar ever built? How do you do that without cannibalizing the green electricity that you want to put into the grid?

JC This word cannibalizing I never understood, we might talk about that later. But let me just answer your question.

ML Well, let me explain. What I mean is, if you've got a location where you can do a renewable energy project, and you've got a choice, you have one person asking for green hydrogen and one person asking to put it into the grid, right? You've only got one, you can only choose one of the two; that's a cannibalization choice. Either that energy goes into the grid, or it goes to hydrogen, surely?

JC Let's discuss later on how it can be also vice-versa... How, so to say, it makes more sense to produce hydrogen out of storage... Later on. Now, let me answer additionality. We believe, Hydrogen Europe believes 100% into that additionality principle; we want green hydrogen to be produced - ten million tonnes inside Europe, ten million tonnes outside. How on earth can that be done without additional renewable infrastructure? So, we are teaming up with our friends from wind and solar, and also, geothermal is also a very, very interesting pathway. And we urge everybody to ramp up the infrastructure. And so we are in that team. Additionality, nothing against it. What we argue is why the discrimination? Why should we discriminate hydrogen only? You might have seen the decision of the German government to have a rationing of electricity for battery cars, and for heat pumps, as of January 24th. So, that was issued last week in an interview, but the papers are already a little bit older. [The] German government will tell you, as of January 24: you have a battery car, you don't drive these days; you have a heat pump, no electricity. So, you see, the scarcity is there for everybody. At the same time, the Germans curtail, fifth year in a row now, average €1 billion of renewable electricity, they simply curtail it. That's not good! So, the grid is not big enough to consume, or to digest all the renewable energy. At the same time, at peak times, they have not enough. So, there you go.

ML But Jorgo, this is a fantastic argument for grid investment, right? It's not a fantastic argument to choose a technology - hydrogen - which is three times less, and in fact, in heating, six times less efficient in it use. It's an argument for grid investment, which I think most people would understand,

JC I understand too, and grid investment means that you need to invest into electricity grids, big time. However, if you calculate what's more expensive - the electricity grid, or the pipelines that you need to move molecules - it is eight to sixteen times cheaper to produce this pipeline system. Let's say with eight - conservative, let's be absolutely conservative - it doesn't make sense to wait until we have all the licenses and permitting for the grid, and you know that this is a problem in many, many countries, especially Germany. What about the climate out there? We have a climate issue. We have these young people telling us, stop it. And that's why we can't lose time. So, even if the efficiency that you put forward here is less, the overall system efficiency, due to the much lesser cost of this grid upgrade, is absolutely doable. The system efficiency is given, that's important. And that's what makes policy makers understand, uh huh, how much do I need to invest into the grid? How much time? How much money? And what is it to repurpose, retrofit, an existing grid and to use hydrogen? And that's the reason why hydrogen is so attractive, because it helps you, it's a vector; it's not just a carrier of energy, it's also a vector. It can store the energy, and that makes it so good.

ML This is a fantastic exposition of... how can I put this nicely... systems thinking which is categorically wrong. Because whilst the pipe can carry the energy in volume more cheaply, if the homework question is, you have electricity in one place, and you need electricity in the other place, then it's absolutely clear that electrical transmission is cheaper. Absolutely clear because of the capital cost, and the losses at every stage, right?

JC It's not, Michael, it's not.

ML So, you end up with a cheap pipe, expensive production -  three to six times as much production - and then you have distribution out, and we can get into why distribution at the retail level makes no sense whatsoever for all sorts of reasons. So, this is just a...

JC Michael, where did you get the figures from, Michael? Where did you get these figures from? We have done a study on charging infrastructure. Very simple, let's stick to one infrastructure for charging of battery cars, and compare it to infrastructure for hydrogen. And we have found that in a scenario where we have 100% electric vehicles - 100% - it would cost the grid in Europe three to five trillion Euros - you wanted to hear trillions, here you have them - three to five trillion Euros, which is quite remarkable. The combined system of electricity, and hydrogen, brings down the overall costs of the whole system to €1.1 to €1.2 trillion, still. You see, to have two infrastructures, gives you less money and more possibilities, because don't forget redundancy. What [happens] if you have problems with one grid, you have a redundant other grid that can help you out - we just experienced that during the war with Ukraine. So, the point here is, to have two grids is cheaper than one grid. And that is what we come up with when explaining to people why it is good to have an extra invest[ment], which brings down your overall costs. And you know very well...

ML Jorgo, I can't refute your trillions and trillions that you've found in a study. But I can say, you know, who knows this stuff best? I would argue National Grid in the UK, who had a gas network, and they had an electrical network, distribution, what did they do? A couple of things that are of interest. Number one, they sold their gas network; they got out of the gas distribution business, they kept the electrical business. Number two, they produce - literally - they call it myth-busting about electric cars, where they point out that the increase in power requirement for the UK for electric vehicles is 10%. So, we have 27 years, we invest a little bit in the grid, we have to upgrade, there's some substations, etc., etc. Most of that charging will happen in people's homes, at their workplace, at the mall. There is no conceivable way that the number that you've quoted of three or four trillion is correct. Nobody would recognize that.

JC I don't know. I don't know. I send you the study, and then we can argue. I give you a British example, and then we talk. There's a cable and a pipeline from the Netherlands to the UK. The cable is with [BritNed], and the pipeline is with BBL. Both are half a billion Euros, of course, both. The interesting extra is it's one gigawatt electricity, it's eight gigawatt hydrogens; it's 20 gigawatt natural gas, but translated into hydrogen, would be only eight gigawatt. One to eight: that's exactly the cost difference that I just mentioned. We know from the DOE - that's a study of the DOE in the US - saying the cost for electricity infrastructure compared to pipes are one to eight. So, it's eight times cheaper, it doesn't make sense then to argue, well, you need to bring electricity there because it's more efficient. The electricity, the energy efficiency is one parameter; you also have cost, and you have this basic CRM, the critical raw material issue. And there we have also done our calculations, very conservative ones. It's at least 40 times less CRM that you need in the hydrogen world, 40 times less, in some calculations 20 times less. And that's an argument, in a time where we have interruption of supply chains, where we have governments seeking urgently to have access to the CRM, and that's a big argument. That's why governments look into hydrogen.

ML So, here's the thing, so with the pipelines, if the homework question is: we have gas at one end, and we need gas at the other, then of course, you use a gas pipeline. The problem when the homework question is electricity to electricity, is the conversions. So, you have to go from electricity to hydrogen; you have to compress it, which by the way, takes more work, because it's light; you have to then pump it through your pipeline; and at the other end, you have to then convert it back into power, which you then are going to put into what, either into the grid, or you don't convert it into a power but you use it in a car which uses two and a half times as much energy because it has a fuel cell or whatever; or you use it in a heat pump, which has something like four to five have times less efficiency. So, when you do the system thinking, it's absolutely clear that if you've got electricity in, let's say, a Morocco, and you want to deliver it to, let's say, Germany or Holland, it would be mad to turn it into hydrogen to do that. And you know, this is something that mystifies me, particularly when we start talking about hydrogen from Namibia and hydrogen from Canada. I mean, the physics simply don't support what you're saying,

JC I hold my mobile phone in my hand - it's black, it looks like a solar panel. This solar panel brings me, gives me, delivers, 100 kilowatts here in Brussels. In Athens, it would do 180, 200. In Doha, it would give me 300. So, the efficiency of harvesting electricity from solar plays a role. And now you just need to make the maths, do the maths. If the transport of this molecule is cheaper over long distance than the reconversion of electricity, then it makes sense. We calculated it, very conservative, and Michael, I can send you everything, and you will see. You end up, same. And then as a policy... You end up the same. And as a policy maker...

ML Jorgo, your phone... Sorry, the delta is irrelevant, right? Because if... I agree, we should do stuff in Doha, marvelous. But the question is whether you want to waste something like 70% of it, bringing it to Europe by hydrogen or bring it to Europe by electricity. Or, and this we also should talk about: move energy intensive industries to Doha, or to Australia or Chile, or Namibia, or South Africa, or Morocco or wherever.

JC That's another point. That's something very, very interesting to have industries there and to use the hydrogen directly there where it's produced. Absolutely right.

JC Or the electricity.

JC Both, both, of course. But it will be a mix, we will have both, because we will have, and if I put myself in the shoes of, let's say a European or German politician; I have the leading industry in using hydrogen in heating. So Viessmann and, Bosch and Vilo. And they say clearly - Mr. Maximilian Viessmann is in his 30s, he's the new CEO - and he says, I'm earning a lot of money with heat pumps, and please buy as many heat pumps as you can. However, as the CEO of this company, I tell you: it is not sustainable. Because we will need to add into the system, fuel cells, stationary fuel cells, for producing heat. That's what Mr. Viessmann, the CEO of the one of the biggest producers of heat pumps says. And the same applies for trucks: I have the leading companies in producing trucks for hydrogen, Daimler trucks, the biggest in the world, IVECO, third biggest in the world. If my... European Industries have a leading advantage, a competitive advantage, globally, why should I tell them, you know what, the hydrogen ladder of Michael says, you're not good. Go to the US or go to South Africa - it would be wrong. So, that is why, as it's system efficient to bring the molecule here, and to achieve in time, climate neutrality... Because that's the other constraint that these guys have. They don't see the power grid being built up that fast, they don't see the storage capacities being built up that fast if it's not hydrogen. That's why they say, okay, we are in a hurry, we need to take this very bold decision to support hydrogen. That's what they do. You might have seen the Franco-German meeting, they have 60 years of Elysee treaty, so the friendship lasts now 60 years, and they celebrated this over the last weekend. And if you read the final remark - I was honestly, I was quite surprised - because France was a little bit hesitant to go for pipelines through France, to go for importation of hydrogen because they said, oh, we can do it on our own, we have nuclear, we can produce pink hydrogen. The paper reads - I was so, so happy to read it - because it understands that this Franco-German couple as the engine of the revitalized Franco-German relation and the European Union. They created the European community of coal and steel back in the 50s; both, after the friendship treaty. Today is the time of building the same on clean tech - I'm not saying hydrogen; I'm saying clean tech - and they are doing it. There's a lot of hydrogen in their joint paper, a lot of surprises even for me. I'm very happy, I have to say, that governments understand that system efficiency issue, and investors do as well.

ML So, I totally understand that somebody making trucks would like to continue making trucks in Europe; somebody making boilers would like to continue making boilers in Europe; somebody delivering gas to households would like to continue delivering gas to households. You know, Toyota would like to continue making cars.... But you know, we also have examples - the European mainframe computer industry, aluminium smelting, in many countries in Europe, national airlines - it doesn't matter what you want: if you get those calculations of system efficiency wrong, then you simply waste tens of billions, hundreds of billions, and you still end up without those industries. Let's talk about mobility, and we can start with trucks if you want. Daimler, and Volvo, to my mind have decided to downgrade their hydrogen activities; they put them into a joint venture, and they don't know if they're going to use liquid hydrogen, or gaseous hydrogen in their trucks. Right now, you can go and buy a battery truck from either those two companies, it can do 200, 300 kilometers, the next batteries will do 500, 700, 800 kilometres. We need to build a charging infrastructure but it is, frankly, pretty straightforward. The system efficiency of that is straightforward. So, why would you go to a system for that sector, which requires enormously more build-out of electrolysis, if you want, green hydrogen, enormously more social license if you want blue hydrogen, and you've got to get the hydrogen to the truck, to the actual charging, to the fueling station. And here you have in the UK, Shell, who surely understands this better than you or I, shutting their fueling stations, right?

JC They don't. It was a testing fueling station. So, fueling stations are growing, we have a clear political mandate, it's called AFIR, the Alternative Fuel Infrastructure Regulation, it's already [inaudible], which means it will be put into practice directly; the EU decides, and member states need to decide. It will be ready in spring, end of spring, with approximately 800 fueling stations all over Europe to cover the TEN-T axis. So, the big road crossings....

ML Liquid or gaseous hydrogen?

JC It's interesting, because so far it's gaseous, but it allows liquid. As this final decision has not been made, and we read with big interest what you are writing about liquids. However, it also would give a competitive advantage to some of the companies. But I'm not arguing about that, I'm arguing about... let's talk about liquid in a second. I'm arguing about just another thing. Did you see the amounts of electricity that we need for the chargers, for the fast chargers, of trucks? It's a midsize town in the US that you need, the electricity for a midsize town. Who on earth has that electricity?

ML Come on, Jorgo, don't. I mean, this is an area I work on. You can have... Look, you have the European Working Time Directive: the truck is only allowed to drive about 250 kilometers before you have to stop. It's a half a megawatt charger, you could do a megawatt charger. It's just not that hard. I'm afraid, I'm sorry. It's just not that hard.

JC I'm afraid to say it's not about the four hours. I agree with you that drivers need to stop, and to pause, no problem. But we don't have this electricity, and that's the question: we do not have it. And now comes the hydrogen.

ML But Jorgo, I'm sorry, but you're proposing a system where you need two and a half times the thing that you've just said we don't have. And then we have to deliver it in hydrogen tube trailers. Let me tell you this, let me give you something: a hydrogen tube trailer, right, the gaseous hydrogen delivery? You have at the moment, a lot of these petrol stations, fuel stations, you have a diesel tanker turns up, it carries 35 tons of fuel, opens up the manhole cover and delivers it, right? To replace one truck, one diesel tanker, requires 16 or 18 tube trailers, right? This from a systems perspective is just not going to happen.

JC So, first of all, we will have mainly also pipelines to help us bring the hydrogen, not to the final fueling station, but to transport it over long distances. Second, you just calculate green hydrogen. What about the turquoise? The turquoise hydrogen will be a very, very important source. So, that's waste to hydrogen, especially plastic waste; all the blades from wind turbines that need to be, so to say, shredded, they will end up in hydrogen; and also shred up from... from the automobile industry.

ML Jorgo, let me do turquoise hydrogen, since you brought it up. Turquoise hydrogen, there's about 50% of the energy in the waste that is used to make the hydrogen, you've consumed in the process, because it's an endothermic process, right? So, what you're doing is you're taking, 50% of the of the energy is used, right? What you could do instead is incinerate the waste, which we do now, generate electricity, put it into the grid, and then drive two and a half times as far.

JC Sorry, and have CO2 emissions right? And have CO2 emissions? Our goal...

ML But you have the same CO2 emissions?

JC I'm sorry, what we produce then is this black carbon, black solid that I have in my hand. So, what we produce is clean hydrogen without CO2 emissions. Incineration is less than 800 degree Celsius; our pyrolysis is over 800, and that means that the carbon will not get married with the oxygen in the air to produce that CO2. No, no, we are clean here. Turquoise hydrogen is absolutely clean and produces something we need in the electricity world: graphite, graphene, very much so, plus carbon fibre. And if you tell me that there will be much, much more carbon solid than we need, that's not true. We also can use it in agriculture. So, don't underestimate this pyrolysis hydrogen, the turquoise hydrogen, that will be in the system. So, it's not that we are cannibalizing; we are building up a new infrastructure, we are building up a redundant system also to cover one of the other big crises of humankind, which is plastic waste, which is waste in general.

ML Jorgo, you make a persuasive argument, I like your little thing, with the black thing, and I like biochar and all that stuff. However, again, system thinking would say, well, why would you not do that, you're going to do that presumably most efficiently in very large centralized plants? And then that hydrogen should be stored centrally, and then centrally used to generate electricity. Because the electricity once it's there is much... it goes much further, drives more transport, drives more heat, as electricity. There's no argument for using it in a truck.

JC There is one big argument. So, first of all, it will not be centralized, it will be decentralized. Municipalities having waste will run pyrolysis, and it's 1/5 of the energy you need for electrolysis. Don't underestimate it. But now you say, we will also use it in trucks, now you say, you better turn it into electricity in trucks: No. And there's one big argument; the big argument [is] the critical raw material, that's the big argument. So basically, to put five tonnes of battery on a truck to go 500 kilometres does not make sense. It does not make sense.

ML It's not five tonnes. I don't know where you get your information from. Jorgo, you said you have these genius information people, I don't know what they're telling you, it's not five tonnes,

JC How much is it? How much is it? How much?

ML The weight of the truck by the time you take out the engine, the gearbox, the differential, the vibration, management... You end up with a truck that's got about three tonnes of batteries to go 800 kilometres and weighs barely more than the existing truck. I don't want to get too distracted by trucks, we still have to do heating.

JC Yeah, but you saw that the biggest producer of batteries in the UK went bankrupt last week.

ML No, no, no. The biggest producer? Somebody who tried, some entrepreneur from outside the sector tried to get the government money, tried to hold the government ransom, to get money for their plant and it failed. I mean, look up DeLorean if you want to know what happened.

JC OK, it failed. Another issue is that we have these high prices, especially in lithium now. And for the first time over the last 20 years, these prices go up. And I tell you why: we need batteries. Our fuel cell trucks need buffer batteries, but much smaller, and this is what makes our case so attractive. The combination of battery and fuel cell - yin and yang - that makes it so attractive to go for that combination. That's system efficiency: much less critical raw material, and much bigger distances that you can then take, and you have next to green hydrogen, also the turquoise hydrogen that makes us really, really happy because we cover different, big questions of humankind.

ML You know, we could go down a whole critical materials pathway, we could talk about platinum, we could talk about iridium, we could talk about how unthinkably much lithium there is in the world. We could talk about how much critical material is required in all of these hundreds of gigawatts of electrolysis... [inaudible]... And I can assure you that that it will not end up... It sounds like you may have to talk to your research team a bit more.

JC Sorry, sorry, Michael, let my research team [off] here. IEA report last week, the big IEA report on clean tech; it's plenty, plenty of information, very down to earth, very good basis for investors, a big case for hydrogen, clearly, and there's a good reason

ML And no fundamental shortage whatsoever of the critical materials needed for electrification. A very high percentage, three, four times more than we have today. But I want to come back to heating because heating was where this started. You gave a talk at the Hydrogen Europe week, where you called me out from the stage for a piece that I wrote called "How Many Grifters Does It Take To Sell A Hydrogen Boiler?" and this seemed to have annoyed you quite a lot. And I want to talk about heating, because certainly in the UK, that is now the front line, whether or not we have hydrogen heating. And I know that there's some stuff going on in Germany and in Holland, also. And the background to my piece was that there is this incredible lobbying effort being put into hydrogen heating. And it's being funded by the gas network operators, funded by the existing boiler manufacturers; and it's making these most extraordinary claims: "Change the change the gas, keep the boiler." And there's some claims like "hydrogen boilers are tried and tested in UK households." It is not informing people; it's asking for people to test, to participate in trials, without telling them the modifications that their homes will need, without telling them about the safety implications, without telling them about the nitrous oxides, without telling them about the hydrogen costs, without telling them about the source of hydrogen. And whilst telling them things about their home couldn't possibly be appropriate for a heat pump and so on. And I have a real issue with that. So, that's why I called out in that piece, that approach to selling their solution as being, I'm afraid, downright unethical.

JC Okay, we can talk about ethics. I'm familiar with a lot of things in the UK, but the UK is quite special. I mean, I'm fascinated by your home country, my brother is a British citizen, so all good. However, I refer to what we do here on the continent: we have last week, the big three-year testing of BDR Thermea, that's a Dutch-French company doing... they invented the first boiler. And after three years of running them in many households, no problems at all - pure hydrogen on a boiler. So, what we experience here is rather positive. I personally have no hydrogen boiler at home, but I drive a hydrogen car for four and a half years now, 70,000 kilometers, no problem at all. So, I'm a little bit... I put question marks whenever these threats and Hindenburg things come up. No! Hydrogen has matured, hydrogen technologies are super mature. I agree with you that not to inform people is absolutely unethical. But please allow me, I'm not to be blamed for what happens in the UK in special tests. I can tell you what happens on the continent and in bigger tests by our member companies - the companies you mentioned are not our members - and we are very satisfied with the results. We can understand that there are policymakers that put the heating basically a little bit at the side, and say, we need to concentrate on the low-hanging fruit in order to ramp up the whole hydrogen technology: that's okay. But to exclude it from now, black and white, like Mr. Graichen does the German State Secretary that you also had in one of your episodes. To say, okay, we will establish here a heat pump dictatorship, we will cut all the other possibilities in German households, and at the same time, do the rationing thing: what's that? So, this is not working. And people are fed up in having this black and white dichotomy thing. So, it's all this or that. It's not! You will have several, several ways of heating your home; you will have several ways of driving, but you should be technology-neutral, unless one thing: CO2 and climate neutral, you need to bring this down. And if a technology is promising - and our technologies are - don't exclude them from now on; you don't know how the price will develop. 20 years ago, we were arguing about solar, everybody was saying, ah, too expensive. But if you look at the abundant things on the earth, out of the first three, two are carbon... Two are hydrogen, and of course, silicon dioxide, silicon. And it's no wonder that silicon - solar - and hydrogen - the next big thing bringing costs down - are so cheap, or will become cheap: they are abundant. And this is how we need to calculate: we need to see which technologies have access to abundancy. And obviously, the technologies that have not are dangerous, are risky.

ML So, you're talking to somebody who made his entire career, at least the last 20 years of it, by tracking the experience curve, right? But I also know two other things. One is thermodynamics: as soon as you start doing these multiple conversions from one thing to the next, to the next, each one of which is lossy, you have thermodynamically-driven, physics-driven losses, that are not going to yield to the experience curve, right? The second thing I know is that you can't bake a cheap cake with expensive components. So, if the solar gets cheap - if you want to argue that it's cheap hydrogen - it's going to come from even cheaper electricity, right? Those relativities don't change. Let me just say, I'm going to add a third thing that I know, which is that when you have a technology that multiplies, you're going to produce a small amount of work very cheaply, as you point out, because the costs of renewables are coming down. You produce a small amount of work, and then you put it into a technology that multiplies it by 3,4,5,6. And by the way, we're not only talking domestic heating, we're talking industrial heat. There is no conceivable way that you're going to do that more cheaply with hydrogen.

ML Sorry, Michael, you are too smart to believe that this ratio is correct. So, first of all, we talked about other cost components already, and they are absolutely, there’s a clear evidence on it. But the other question is, what's the expiry date of an electron? What's your opinion?

ML Ah, you're going to do the one second [pop] thing, right?

JC Unfortunately, and what's the expiry date of a molecule, of hydrogen? So, that's the point! You cannot compare!

ML Excuse me, if you look on my ladder, if you look on my famous ladder, you will see that the long duration storage is on level two, a B, in other words, it's very attractive. It's not certain that it'll be hydrogen, but very attractive. But if you gave me free hydrogen, and asked me to keep the lights on and the cars charged, and the buildings heated, it's very clear what I would do: I would store it centrally, in a salt cavern or a depleted gas field; I would then generate electricity centrally and put it into a grid which has received all of the investment that you are begging for from the EU. Because all of this... You know, when you say, we have to give people choice, and people are fed up, what's actually happening there is, you are demanding large amounts of money - we said it, tens of billions, hundreds of billions, even trillions - for a solution which is appropriate for your members, for obvious reasons. But if you took a fraction of that and put it into the grid, we would have solved problems long ago.

JC Sorry. First of all, I think I made crystal clear that the investments into the power grid are not to be disputed; they need to be done. We are not against that, please don't get me wrong. However, it will be cheaper, if you have a... second system, I'll explain why. It's always the last 20%... Nearly, in all of our life, the 80% power grid, fine. But the 20% that you need to have 100%, battery or heat pump use, battery power or heat pump us, this is the big part of the investment that we cannot afford. And that is why the study - and I will send it to you - which explains two are cheaper than one, is absolutely compelling. This is what we want to do: we are not going to tell people; my members want this... No. We work together with a lot of also civil society, NGOs, members of parliament, politicians. So, it's not my members only. And don't forget the real research, don't forget academia.

JC But Jorgo, can I ask you a question? How come - there's this study done by Mr. Jan Rosenow - how come when you exclude all of the reports that are produced by everybody with skin in the game; you get rid of all the people, all the reports by the gas industry, the heating industry, by your members, the hydrogen industry, you come out with 32 reports - IEA, McKinsey, DNV, really serious organizations - and not one of them agrees with your analysis? Literally not one gives anything other than a marginal role for hydrogen in heating.

ML I'm not sure it's true. Well, ah, for heating. Well, for heating, the only thing we are saying is, don't exclude it. It might be that today, given the conditions of today, it's marginal; but don't exclude it, because it might become bigger. That's all we say.

ML Jorgo, what does don't exclude it mean in practice, right? A heat pump is an individual decision, right? Gas in the street is not an individual decision, it's a decision of a municipality, and therefore it is one which yields to lobbying and lobbying, I would argue, only.

JC Let me give you the answer. So, the German government came up now with an ordre de mufti saying, municipalities, cut down the distribution grid, for any gas. Cut it down, because we will only concentrate on heat pumps. This is what is not okay. Let it be, let it stay there! If a municipality has a lot of waste to turn into hydrogen - clean hydrogen - why shouldn't they do it? And if they think, if they deem it right to be used for heating, why on earth should they be excluded to do so? And that's what I mean, nothing else. You can do your Hydrogen Ladder, and I really love the debate [around] your Hydrogen Ladder, because it makes us [to] sharpen our argument. And thanks for that, but our arguments are still valid. So, I'm only asking not to exclude it. No exclusivitis, that's a disease. I'm not asking to make it big; it will become big if people choose it. But keep it open.

ML Jorgo, I'm very conscious of the time, I promised that I would let you go at half past the hour. Do we have time to do aviation? Or should we leave that for another time?

JC I would love to have another discussion with you when aviation becomes bigger. I enjoyed it very much for today, but I really have a hard cut.

ML Okay, so very good. So... I'd love to have that other discussion, and we'll talk about how you get hydrogen to airports, because in my view, you basically don't. But let's leave it there. It's been a great pleasure talking to you, and to be continued in person hopefully.

JC Absolutely. With a beer, for the right time, and not just a coffee or a tea.

ML Very good. A good German beer, Reinheitsgebot-compliant German beer. I'm all for it.

JC Thank you, thank you, Michael. It was a pleasure.