Since lockdown measures were enforced in response to the Covid-19 pandemic, global pollution levels have dropped and many people claim to have benefited from lower emissions. As the restrictions ease, policy-makers will be examining ways in which future economic growth can be made more sustainable.

In Germany’s Saxony-Anhalt, leaders are bullish about future prospects for their new mobility sector. With its long history in automotive innovation, the state is positioning itself as the green hydrogen state. 

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“Around 270 automotive suppliers currently employ 26,000 people, providing a considerable proportion of the state’s economic power,” says Jürgen Ude, Saxony-Anhalt’s state secretary at the ministry of economy, science and digitalisation. “Companies and research institutes in Saxony-Anhalt are contributing in key areas, putting forward the ideas and requirements for the cars of the future, be it in lightweight design, innovative drive technologies, or battery and fuel cell technologies.”

Research centre

Thomas Einsfelder, general manager of local economic development agency Investment and Marketing Corporation Saxony-Anhalt (IMG), reports that the region is establishing itself as a centre for drive technology research and production. 

“Components, systems and technologies are developed here to meet the needs of original equipment manufacturers (OEMs) and national and international trends, with factories less than 150km away,” he says. 

“Our companies are specialised in producing high-quality products, particularly shafts, wheelsets, steering and engine components, metal casting, sheet shaping and finishing.”

Mr Einsfelder lists Saxony-Anhalt’s attractions for investors. “The German legal system protects private property and individual rights. Competitive tax regulations and a wide range of funding options, especially for R&D, offer a strong framework for investments. The excellent infrastructure, local science and research institutes and the highly qualified workforce are further factors that contribute to sustainable business success.”

Attractive location

The state’s geography is also attractive, says Mr Ude. “Our location offers enormous potential for renewable energy, with many companies expert in the production and industrial use of hydrogen and there is an extensive production infrastructure for the gas which can also be used for green hydrogen,” he adds. “For example, central Germany not only has the nation’s second largest hydrogen pipeline network, but its salt caverns also offer high-volume storage capacity.”

The state has notched up several major investment projects in the mobility sector. “Farasis, one of the world’s leading battery manufacturers, is building a production facility for battery cells, modules and packs in Bitterfeld-Wolfen in the next few years,” says Mr Ude. 

“This will see an investment of €600m and the addition of at least 600 new high-quality jobs. The location of the Bitterfeld-Wolfen Chemical Park, one of 12 centres of excellence in Saxony-Anhalt, offers the US corporation the ideal conditions in which to accelerate its growth in the European market and to supply local OEMs such as Daimler,” he adds. “Another investment has been announced by Dutch company AMG, which plans to build Germany’s first refinery for the production of lithium hydroxide for batteries in the Zeitz Chemical and Industry Park.” 

Other projects of note include FEV’s expansion of its battery development and test centre in Sandersdorf-Brehna; battery and fuel cell specialist HORIBA FuelCon’s expansion of its facilities near Magdeburg; Tesvolt’s construction of a new manufacturing facility for producing lithium accumulators in Lutherstadt Wittenberg; and Porsche and Schuler’s joint plans to manufacture car body parts in Halle from 2021. 

“All of these business location and expansion projects will lead to the creation of new, high-quality jobs, which will have a sustained, positive impact on the economic development of the region as a whole,” says Mr Ude. “And it will also have a knock-on effect for further company projects. This will benefit Saxony-Anhalt as a location for business as well as the state’s science sector.”

Talent availability 

The region’s universities and research institutes, which include the Fraunhofer Institute, play an important role in the new mobility sector. Mr Ude says the state is also supporting the creation of a new centre for method development (CMD) at Otto von Guericke University in Magdeburg. 

“The main focus of the CMD will be to develop solutions for shortening engineering development processes in the automotive sector, which is undergoing a structural transformation. The transition to electromobility, lightweight design and environmentally friendly fuels also poses a significant challenge for suppliers in Saxony-Anhalt. In order to strengthen our companies, we will help strengthen the sector and develop the Magdeburg-Barleben region into an e-mobility campus,”  he says.

The region is home to several centres of excellence, including some that support the new mobility sector. 

“The highly specialised research institutes have aligned themselves with the production processes,” says Mr Einsfelder. “There is a very special experimental spirit in this area, which has been responsible for many historically important engineering achievements.

“Thanks to the innovative cooperation of the state’s clusters and the good research networking of local companies, Saxony-Anhalt has become a driving force for the automobile of the future. In lightweight construction and electromobility, the state is playing a steadily growing role as a supplier to the automotive industry.”

Established infrastructure

Joachim Wicke is chairman of Hypos, a network for stakeholders of the hydrogen economy, including small and medium-sized enterprises, industry, universities and research institutions. He says Saxony-Anhalt compares favourably with other regions because it offers an existing infrastructure for a green hydrogen economy, and industry, science and politics are networked in an exemplary manner through Hypos. 

“More than 100 Hypos members are pursuing the common aim of establishing a cross-sector green hydrogen economy,” he says. “Currently, there are 32 project consortia researching the innovation potential of electricity provision, from production and storage up to distribution and use of green hydrogen in the chemical industry, refinery, mobility and power supply. The German federal ministry of education and research is providing €45m of funding for the scheme as part of its Zwanzig20 – Partnership for Innovation programme.”

Mr Wicke believes the hydrogen industry will create jobs and help to overcome economic challenges. “We see potential for the application of green hydrogen in the power supply, chemicals, refining and mobility sectors. In addition to the significant potential to decarbonise these first three sectors, mobility is an extremely promising field of application for green hydrogen,” he says.

“Fuel cell vehicles are an ideal addition to battery electric mobility for the heavy duty sector and for long distances. Green hydrogen could be used for mobility solutions in rail transport, heavy duty, bus transport, and logistics, and for municipal fleets such as refuse vehicles or street sweepers.”

In association with Investment and Marketing Corporation (IMG) Saxony-Anhalt. Writing and editing were carried out independently by fDi Magazine.