TotalEnergies and RWE's Green Hydrogen Deal: A Milestone in Decarbonization

In a landmark move for the hydrogen market, TotalEnergies and RWE have signed a 15-year agreement to supply 30,000 tons of green hydrogen annually to TotalEnergies' Leuna refinery in Germany, starting in 2030. This deal, the largest of its kind in Germany, is set to prevent the emission of 300,000 tons of CO2 per year, underscoring the growing importance of green hydrogen in the decarbonization of Europe's energy sector.

The agreement, announced on March 12, 2025, is a significant step in TotalEnergies' ambition to decarbonize the hydrogen used in its European refineries by 2030. The green hydrogen will be produced by a 300 MW electrolyzer built and operated by RWE in Lingen, with local storage and delivery via a 600 km pipeline to the Leuna refinery. This infrastructure is part of Germany's hydrogen core network, which connects ideal production sites with large centers of industrial hydrogen consumption.

The economic and environmental benefits of this agreement are substantial. For TotalEnergies, the deal provides a stable and long-term supply of green hydrogen, crucial for achieving its decarbonization goals. The reduction of 300,000 tons of CO2 emissions annually is equivalent to the emissions of 140,000 cars, highlighting the environmental impact of transitioning to green hydrogen.

For RWE, the agreement secures an anchor customer for its 300 MW electrolysis plant, demonstrating the viability of long-term contracts in the green hydrogen market. Markus Krebber, CEO of RWE, noted, "This shows that hydrogen works with the right incentives for customers." The success of this project can inspire similar initiatives across Europe, contributing to the broader goal of decarbonizing the energy sector.

The role of government policies and infrastructure in supporting the growth of the green hydrogen market cannot be overstated. The completion of the H2 backbone by German authorities is essential for enabling this supply relationship. Patrick Pouyanné, Chairman and CEO of TotalEnergies, stated, "This long-term contract for green hydrogen marks an important milestone to reducing our CO2 emissions at our Leuna refinery. It will be made possible thanks to the completion of the H2 backbone by German authorities and their efficient support to green H2 customers like our Leuna refinery."

Additionally, the German government's financial support and regulatory framework are critical for the successful transformation of the industry towards climate neutrality. Stephan Weil, Prime Minister of Lower Saxony, emphasized the importance of this support: "The production and marketing of green hydrogen on an industrial scale, which we as a state also support financially, is an essential prerequisite for the successful transformation of our industry towards climate neutrality. Lower Saxony is leading the way in this area in Germany: 50 per cent of the EU-approved production of green hydrogen in Germany is in Lower Saxony, and 20 per cent of the hydrogen core network is being realised in Lower Saxony."

However, the transition to green hydrogen is not without its challenges. The cost competitiveness of green hydrogen remains a concern, with analysts warning that it will struggle to compete with gray hydrogen made from natural gas until at least 2050. Additionally, the development of the necessary infrastructure, such as the H2 backbone, is crucial for the success of these projects.

Despite these challenges, the agreement between TotalEnergies and RWE sets a precedent for future green hydrogen projects in Germany and Europe. The long-term commitment, government support, and infrastructure development demonstrated in this deal provide a roadmap for other companies looking to decarbonize their operations. As the world continues to grapple with the challenges of climate change, initiatives like this one will be crucial in achieving a sustainable energy future.