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The European Commission has approved the €350m ($379m) German scheme designed to support renewable hydrogen production.
Being implemented through the European Hydrogen Bank’s ‘Auctions-as-a-service’ (AaaS) tool, the approved scheme will ensure up to 90MW of electrolysis capacity and incentivise production of up to 75,000 tonnes of hydrogen.
Upon its approval, the Commission found the scheme is “necessary and appropriate to facilitate the production of renewable hydrogen and thus the decarbonisation of the industrial, transport and energy sectors.”
The Commission added that “the measure has an incentive effect, as the beneficiaries would not carry out the relevant investments without the public support.
“Germany put in place sufficient safeguards to ensure that the scheme has a limited impact on competition and trade within the EU.
“The aid will bring about positive effects, in line with the European Green Deal, that outweigh any possible negative effects in terms of distortions to competition.”
Germany became the first EU member state to participate in the scheme and revealed its initial plans for €350m in its national budget last Decemeber (2023)
The scheme will allow the country to finance additional projects that are not selected by the Innovation Fund-backed European Hydrogen Bank auction.
Read more: Germany earmarks €350m for EU-style renewable hydrogen auction
The funding will be awarded through a competitive bidding process supervised by the European Climate, Infrastructure and Environment Executive Agency (CINEA). Bidding closed on February 8 and the Agency is now assessing and ranking bids for projects in all member states.
Margrethe Vestager, the European Commission’s Executive Vice-President in charge of competition policy, said, “The scheme will support the most cost-competitive projects in Germany, reducing costs for taxpayers and minimising possible distortions of competition.”
Germany is aiming to achieve 10GW of domestic electrolysis capacity by 2030 – doubled down from 5GW in 2023 – and want to contribute to the EU target of a minimum of 42.5{c431b1036349617aea55b35aa92592c3cb3fecc7f94273a754a3b674e9a603ce} renewable energy production by 2030.
Read more:Germany doubles domestic hydrogen production target to 10GW while planning import strategy