Energy expert: "Race in passenger cars in favor of the electric drive is over."

What should a climate-neutral energy supply look like?
The key is electricity from renewable energies. To stay on course for climate neutrality, we need to increase the share of renewable energies in Germany to 70 to 75 percent by 2030. To achieve this, we must fully exploit the available areas for wind and solar energy and achieve growth similar to peak years.

Where are the bottlenecks?
The Renewable Energy Act does not meet the requirements. Although the adopted amendment has strengths in renewable electricity generation for self-consumption, such as the promotion of solar systems on private roofs, we still have the brakes on for other areas of solar and wind energy. Simplified planning procedures are also a crucial factor. By 2022 at the latest, we need the next EEG reform to stay on the necessary growth path.

Electricity and hydrogen are considered the big alternatives. What is your stance?
The economically most affordable climate-neutral energy carrier is electricity – therefore, expansion in this area must happen the fastest. Climate-neutral hydrogen will also be a pillar of the energy transition. However, hydrogen will not become cheap in the long run – due to conversion losses, investment costs, and transportation costs during import.

The motto should be: electrify as much as possible, use hydrogen as much as necessary.

What makes sense where?
For passenger cars, we should have the courage to make a clear decision:

The race has been won in favor of the electric drive. It makes no sense to spend money on experiments here.

The same applies to decentralized building heating: we should not let scarce funds evaporate in areas where hydrogen clearly has no future. In other sectors, such as trucks, the best solution is yet to be determined. We need to organize a search process there. And then there's a third area where hydrogen is indispensable. This applies to the iron and steel sector or the chemical industry.

Is technology neutrality not better than setting strict guidelines?
The often criticized lack of technology neutrality is partly a myth. Take the purchase premiums for cars:

In Germany, you receive the same subsidy for electric vehicles as for fuel cell cars, both are treated equally under the European fleet limits.

The distortion is actually the other way around: In the current EEG amendment, the electricity for hydrogen production is largely exempt from the levy. This is also correct. But why does this not apply to the electricity used to charge electric cars or operate heat pumps? This is a bias in favor of hydrogen – even if interested parties claim otherwise.

Do you see niches for other solutions – for example, synthetic fuels?
Yes, in aviation and parts of maritime shipping, where there are no alternatives. There will always be some smaller niches. But this is not a path that should be broadly pursued. The conversion technologies are too inefficient and too costly in the long run.

Critics say: We should be climate-neutral well before 2050. What would change as a result?
You can set very ambitious normative goals. But in the end, they must also fit with investment cycles – we are talking about twelve years for passenger cars, 20 years for steel plants, 30 years for buildings, and at least 50 years for infrastructures. Achieving climate neutrality by 2035 is hard to reconcile with this. I know these are painful discussions – but we mustn't fool ourselves.

We have a lost decade behind us in climate policy – you don't just make that up easily.

What does a realistic path look like?
We must try to move forward as quickly as possible. A concrete example is the charging infrastructure for electric cars. At least in major cities like Berlin, we are already well positioned – but charging stations are lacking for strong growth. They need to be quickly established. The same goes for heating networks: the motto can only be: expand, expand, expand. At the same time, we need to organize the ramp-up of hydrogen in the industry. If a blast furnace in a steel plant is renewed at great expense, it cannot be corrected after a few years. Or it becomes very costly. Additionally, we need to promote the market exit of CO₂-intensive capital stocks. And we must not forget the social question.

What exactly do you mean?
We come from a system with medium investment costs and high operating costs. Whether it is cars, power plants, or steel plants.

In the future, acquisition costs will dominate – whether for electric cars, wind turbines, or a CO₂-free steel plant.

Over the lifespan, the new technology is usually cost-saving. But how do you deal with people who don't have the initial investment funds needed to save money over time? This is a problem that has not been addressed much so far.

What could a solution look like for car purchases?
For cars, affordable leasing and rental models can make a contribution. At least in the lower and middle price ranges. Another possibility: paying off while charging.

This could mean, for example, that I pay back my car loan in manageable installments with each charging process.

At the same time, I could benefit from the fact that electricity is cheaper than gasoline today. Such models to spread capital costs will be a major topic.

The conversation was first published in Volkswagen's newsroom.

• About the person:

Dr. Felix Matthes (58) is the research coordinator for energy and climate policy as well as energy and climate protection at the Ökoinstitut. He conducts research on decarbonization strategies, coal phase-out, emissions trading, and electricity market regulation, among other topics. Matthes was a member of the federal government's coal commission and is currently a member of the national hydrogen council. He lives in Berlin.