H&R GmbH : inaugurates world's largest dynamic hydrogen electrolysis plant

Press Release

H&R GmbH & Co. KGaA inaugurates world's largest dynamic hydrogen electrolysis plant

- Hydrogen as the key to climate protection

- Amount of value added by Hamburg refinery site is increased

Salzbergen, 24 November 2017. Hydrogen is the key to climate protection. With this in mind, the world's largest dynamic hydrogen electrolysis plant based on the so called PEM technology (Protone Exchange Membrane) is being inaugurated in Hamburg-Neuhof. H&R Ölwerke Schindler, a subsidiary of H&R GmbH & Co. KGaA (abbreviated form: H&R KGaA; ISIN DE000A2E4T77), is the developer of the project to generate hydrogen, which did cost more than EUR10 million. The plant's centerpiece, a Siemens-built electrolyzer with 5 MW of electric capacity, will produce several hundred tons of hydrogen per year. The hydrogen will not be used to produce energy as usual, but instead will be used as a resource to add value in refinery processes.

By opening the dynamic hydrogen electrolysis plant at its refinery site in Hamburg-Neuhof, H&R Ölwerke Schindler GmbH will be taking a big step toward achieving its "Green Refinery" concept. More than EUR10 million has been invested to build the plant which will generate hydrogen from electricity and water. "We are very proud that we were able to realize the largest plant of its kind worldwide - with H&R," says Michael Weiss, project manager at Siemens AG in Hamburg. For years, Siemens has committed itself to decentralized energy and storage systems and is campaigning for their establishment as part of the energy transition.

Company's focus on sustainability combines economics and ecology

The Hamburg Environmental Agency procured EUR2.5 million of the total investment amount from the European Union's European Regional Development Fund (ERDF). Hamburg applies the funds from the ERDF in a targeted fashion to promote innovation and sustainable growth. H&R currently uses hydrogen in its production processes to extract specialty products, such as paraffins, white oils and process oils that are then further refined into cheese rinds, lipsticks, printing inks or car tires.

"But actually, producing hydrogen from water and electricity is only the first step in our long-term plan," explains Niels H. Hansen, Managing Director of H&R KGaA. "Long term, we want to further develop our existing plants and sites. Today, we mainly use fossil fuels as our raw materials; in the future, these will be supplemented - first from renewable sources, then long term with synthesized products manufactured in CO₂-neutral processes using sustainable energy," Hansen stresses. "We will use our existing plants, but at the same time we recognize our environmental responsibility and are therefore successfully reorienting the company toward sustainable solutions."

Protecting the climate through technology

These options illustrate this technology's potential use in protecting the climate - well beyond the specialty oils market. "Dynamic" means that the hydrogen electrolysis plant can take advantage of last-minute surges in electricity production, i.e. from wind turbines, to produce hydrogen. Currently, 2% of potential electric power is lost, because Germany occasionally produces more electricity than it consumes. As a result, solar facilities and wind turbines are shut down. In northern Germany, around 15% of potential energy is lost.

Hydrogen-generation plants can be used as buffer storage facilities to stabilize grids in periods of high alternative electricity generation. At the same time, the hydrogen produced can be used as "raw material" for refining processes. "The keyword is integrated energy," Hansen explains, again stressing the linkage of the electric power sector with industrial-scale use of hydrogen as a raw material. "We consider ourselves to be real innovation leaders in this area."

Reducing waste from the processing of mineral oil

H&R still relies on mineral oil as a basic raw material. "Far too precious to burn," says Detlev Wösten, Managing Director of K&R KGaA, who is also in charge of the company's refinery technologies. As a result, in recent years, H&R has managed - by continuously working to further develop its refinery processes, such as distillation, refining and deparaffinization - to reduce to just under 25% the percentage of residual materials left over from production. These residuals are burned, for example as heating oil. The propane-deasphalting plant opened in 2011 following around EUR45 million of investment has made a big contribution toward this goal.

"But development never stops," notes Hansen. "By 2020, we will use 90% of our mineral oil for high-value applications."

Contact information:
H&R GmbH & Co. KGaA, Investor Relations/Communications, Ties Kaiser?

Neuenkirchener Strasse 8, 48499 Salzbergen
?Tel. +49 40 43218-321, Fax: +49 40 43218-390
e-mail: ties.kaiser@hur.com
www.hur.com

H&R GmbH & Co. KGaA (formerly H&R AG):
H&R KGaA is a specialty-chemicals company listed on the Frankfurt Stock Exchange's Prime Standard segment (ISIN DE000A2E4T77). It develops and manufactures crude-oil-based chemical and pharmaceutical specialty products and produces high-precision plastic parts.

Forward-looking statements and forecasts:
This press release contains forward-looking statements. The statements are based on the current estimates and forecasts by the Management Team and the information available to it at this time. These forward-looking statements do not provide any warranty for the future developments and results contained therein. The future developments and results are dependent on a number of factors; they entail various risks and contingencies and are based on assumptions which could prove to be incorrect. We do not assume any responsibility for updating the forward-looking statements contained in this press release.