Brussels ( Brussels Morning) – The EU Commission approves a €350 million German state aid plan to boost renewable hydrogen production, aligning with green transition goals.
Today, the European Commission has agreed, under EU State aid regulations, a €350 million German scheme to sustain the production of renewable hydrogen via the European Hydrogen Bank’s “Auctions-as-a-Service” mechanism. Under the idea of Auctions-as-a-Service, Member States may decide to utilise the EU-wide pilot auction instrument under the Innovation Fund to give a pre-defined amount of national grant to renewable hydrogen production schemes on their territory.
According to the Commission, German action is in line notably with the purposes of the REPowerEU Plan and the European Green Deal Industrial Plan. It will contribute to further lowering imports of Russian fossil fuels and quickly forward the green transition.
Germany informed the Commission of its intention to present a €350 million scheme to back the production of renewable hydrogen via the “Auctions-as-a-Service” tool within the European Hydrogen Bank. The endorsed scheme will fund the construction of up to 90 MW of electrolysis capacity and is anticipated to incentivise the exhibition of up to 75,000 tonnes of renewable hydrogen. This will allow Germany to achieve its aim to have at least 10 GW of domestic electrolysis power by 2030 and donate to the EU mark of a minimum of 42.5% renewable energy production by 2030, to achieve 45%.
The aid will be granted through a competitive bidding process commanded by the European Climate, Infrastructure, and Environment Executive Agency (CINEA). The bidding closed on 8 February and the Agency is presently assessing and ranking bids for schemes in all Member States. The support delivered under this German scheme will be available to companies planning to build new electrolysers in Germany.
Under the scheme, the support will take the form of a direct contribution per kilogram of renewable hydrogen created. The aid will be awarded for a maximum duration of ten years. Beneficiaries will have to demonstrate adherence to EU criteria for the production of renewable fuels of non-biological origin (RFNBOs). This includes donating to the deployment or financing of further renewable electricity which is required to produce the hydrogen supported under the project.
The Commission evaluated the measure under EU State aid regulations, in particular of the Treaty on the Functioning of the European Union, which allows Member States to fund the development of certain economic actions under certain conditions, and the 2022 Guidelines on State aid for climate, environmental protection and energy (‘CEEAG’).
In special, the Commission discovered that: The scheme is necessary and proper to encourage the production of renewable hydrogen and therefore the decarbonisation of the industrial, transport and/or energy sectors; The action has an incentive effect, as the beneficiaries would not undertake the relevant investments without public support; Germany put in position sufficient safeguards to guarantee that the scheme has a narrow impact on competition and trade within the EU. In certain, the beneficiaries will be determined following an open, transparent and non-discriminatory bidding procedure and the support will be kept to the minimum necessary to launch the projects; The aid will convey positive results, especially on the environment, in line with the European Green Deal, that overshadow any possible negative consequences in terms of distortions to competition.
