Amidst escalating tensions between Ukraine and Russia, it is not only the possibility of natural gas supply disruption to Europe that is vexing the energy sector. The threat of destabilisation as a result of Russia’s military advance in Ukraine could directly affect the future of European investments in the development of renewables and hydrogen technology in the country.
In light of the dangers of military destabilisation, Germany has already started the conversation around the issue.
“The current climate [Russian threats] is weighing on the economic climate in Ukraine. That’s exactly why we’re getting involved at the moment to support Ukraine in this situation”, said a spokesperson of the Federal Foreign Office of Germany at the government press conference which was dedicated to Russia-Ukraine relations, on 21 February in Berlin.
“Is that a burden for the plans to invest in renewables and in hydrogen in Ukraine? Of course, it is but it does not only affect this sector but the entire economy. Wherever people and companies invest in the future in Ukraine, this is, of course, made extremely difficult by the current tensions”, the spokesperson underlined.
To help Ukraine’s overall economic stability and counteract difficulties in the investment climate, earlier this month, the Federal Chancellor of Germany, Olaf Scholz visited Kyiv and reassured the country about the distribution of 300 million euros in loans.
With respect to hydrogen, last month, the Federal Foreign Office of Germany unveiled its plans that it wants to set up a Hydrogen Diplomacy Office in Kyiv in order to use the Office for the promotion of investments in the local hydrogen economy and import clean hydrogen for its own industrial sector. However, the current tensions and unfavourable environment has put the fate of the plan in question.
As part of the US-Germany Climate and Energy Partnership, Germany has committed itself to support Ukraine’s energy transition, energy efficiency and energy security through establishing Green Fund. As a result, Germany and the United States have teamed up to promote investments of at least 1 billion US dollars in the Green Fund for Ukraine, including from third parties such as private-sector entities.
Germany alone intends to provide an initial donation to the fund of at least 175 million US dollars. The fund will promote the use of renewable energy, facilitate the development of hydrogen, increase energy efficiency, accelerate the transition from coal and foster the carbon neutrality of Ukraine.