To tackle the increased fossil fuel consumption and challenges coming in the way of green transition, countries are bringing forward different schemes. Recently, EU Commission approved €350 million German state aid scheme of renewable hydrogen production.

Germany informed the Commission about the introduction of a €350 million scheme for supporting renewable hydrogen production. This would be done through the Auctions-as-a-Service tool within the European Hydrogen Bank. The scheme will be awarded through competitive bids under the supervision of the European Climate, Infrastructure and Environment Executive Agency (CINEA).

Objectives

  • To support the construction of up to 90 megawatts electrolysis capacity.
  • To encourage the production of around 75,000 tonnes of green hydrogen.
  • To support companies planning new electrolysers in Germany.

The Commission said, “Germany had put sufficient safeguards in place to ensure the scheme complied with state aid rules that secure fair competition between EU member states.”

The Competition Commissioner, Margrethe Vestager said, “The scheme will support the most cost-effective projects in Germany, reducing costs for taxpayers and minimising possible distortions of competition.”

“Germany is the first member state to make use of this auction, which offers an accelerated solution for awarding public support in this important sector,” Margrethe further added.

Assistance Highlights

  • The assistance will be in the form of a direct grant provided on production of per kilogram of renewable hydrogen.
  • The aid will be granted for 10 years max.
  • Beneficiaries need to prove their compliance with EU criteria for the production of renewable fuels of non-biological origin (RFNBOs).
  • The measure is in compliance with the objectives of the European Green Deal Industrial Plan and REPowerEU Plan.
  • It aims to further reduce fossil fuel imports from Russia and speed up green transition.

Germany is aiming to develop around 10 GW of domestic electrolysis capacity and 45% renewable energy generation by 2030. The country is aiming to contribute to the EU’s target of a minimum of 42.5% renewable energy production.

The Commission’s Assessment

The EU Commission approved €350 million German state aid scheme as per the EU State Aid rules. In particular, the Commission found the following useful points:

  • To facilitate the production of renewable hydrogen for transport, industrial, and energy sectors, this scheme is appropriate and necessary.
  • The scheme will bring positive effects on the environment. It is aligning with the European Green Deal that removes any possible negative effects, if any in terms of distortions to the competition.
  • Beneficiaries will benefit from its incentive effect. They would not carry out relevant investments without public support.
  • Germany has placed sufficient safeguards to ensure limited impact on trade and competition within the EU.
  • The selection and bidding process will be open, non-discriminatory, and transparent.

Source: Commission approves €350 million German State aid scheme

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Elliot is a passionate environmentalist and blogger who has dedicated his life to spreading awareness about conservation, green energy, and renewable energy. With a background in environmental science, he has a deep understanding of the issues facing our planet and is committed to educating others on how they can make a difference.

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