EU Commission Greenlights $380M German State Aid Scheme For Renewable Hydrogen

EU Commission Greenlights $380M German State Aid Scheme For Renewable Hydrogen - Carbon Herald
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The European Commission has given the nod to a $380 million (€350 million) German State aid scheme aimed at supporting renewable hydrogen production through the European Hydrogen Bank‘s innovative Auctions-as-a-Service (AaaS) tool.

Aligned with the objectives of the REPowerEU Plan and the European Green Deal Industrial Plan, this initiative is set to limit imports of Russian fossil fuels while propelling the green transition forward.

Germany’s scheme will foster the establishment of up to 90 MW of electrolysis capacity, incentivizing the production of approximately 75,000 tons of renewable hydrogen.

The move is aligned with the nation’s ambition to secure at least 10 GW of domestic electrolysis capacity by 2030 and contribute to the EU’s target of achieving a minimum of 42.5% renewable energy production by 2030, with a further aim to reach 45%.

Under this initiative, aid will be dispensed through a competitive bidding process overseen by the European Climate, Infrastructure, and Environment Executive Agency (CINEA).

The bidding process concluded on February 8, and the Agency is presently evaluating and ranking bids for projects across all EU member states.

Relevant: EU Commission With €3B Green Hydrogen Support

The support offered under the German scheme will be open to companies intending to construct new electrolyzers within Germany.

Taking the form of a direct grant per kilogram of renewable hydrogen produced, it will be extended for a maximum of ten years.

Beneficiaries must demonstrate compliance with EU criteria for the production of renewable fuels of non-biological origin (RFNBOs), including contributing to the deployment or financing of additional renewable electricity necessary for hydrogen production.

The Commission’s evaluation, conducted under EU State aid rules, found the German scheme to be necessary and apt for facilitating renewable hydrogen production and subsequent decarbonization across industrial, transport, and energy sectors.

It determined that the scheme has an incentive effect, with beneficiaries unlikely to proceed with relevant investments without public support.

Moreover, Germany has put in place adequate safeguards to limit its impact on competition and trade within the EU.

Margrethe Vestager, Executive Vice-President in charge of competition policy, highlighted the significance of this initiative for boosting renewable hydrogen development, stating, “The scheme will support the most cost-effective projects in Germany, reducing costs for taxpayers and minimising possible distortions of competition.”

Read more: Germany Is Planning A Core Hydrogen Pipeline Network By 2032

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