The European Commission (EC) has given the go-ahead for a massive hydrogen research and innovation collaboration to access up to €5.4bn ($5.5bn) in cash from member states, allowing the project to begin work building a European “hydrogen ecosystem” from the ground up.

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The Hy2Tech scheme, which comprises 41 separate projects from 15 different EU member states, was approved for state-aid funding on Friday as an Important Project of Common Interest (IPCEI) by the EC, exempting it from some of the strict rules prohibiting member states from directly funding projects.

State government funding will also unlock up to €8.8bn in private investment in hydrogen, the EC said.

A total of 35 companies are involved in the Hy2Tech collaboration, covering hydrogen production, fuel cells, H2 storage, transport and distribution, as well as the development of hydrogen products for end users, especially in the mobility sector.

The idea is that the individual projects work together to build a hydrogen supply chain and demand base from scratch.

“It is expected to contribute to the development of important technological breakthroughs, including new highly efficient electrode materials, more performant fuel cells, innovative transport technologies, among which [will be] first-time roll out hydrogen mobility [technologies],” the European Commission said.

Unsurprisingly, the latter element is dominated by large vehicle manufacturers Iveco, Daimler and Hyvia, while the storage, transport and distribution track includes companies such as Italian utility Enel, which is experienced in moving fossil-gas for its thermal plants.

Engineering giants John Cockerill and Cummins — both electrolyser manufacturers — feature in the hydrogen generation element, as well as six small and medium-sized enterprises.

And several companies are involved in two or more streams of the supply-chain construction, including Orsted, Enel, Iveco, Daimler and Bosch. Wind turbine maker Nordex, which last year joined German hydrogen coalition H2Global, is also contributing to the hydrogen generation technology stream.

“With this IPCEI, we see EU hydrogen production moving ‘from lab to fab’; and our industry turning technological mastery into commercial leadership,” said European Commissioner for the internal market, Thierry Breton. “We know what is at stake: Europe's position as a leading region for the hydrogen industrial transformation.”

Details around the individual projects remain confidential and it is not yet clear whether the H2 production strand of the Hy2Tech project exclusively comprises green hydrogen technologies, or whether blue hydrogen kit to produce H2 from fossil gas will also feature.

The EC has so far resisted calls to back blue hydrogen, agreeing to provide carbon contracts for difference subsidies to renewable and fossil-free H2 only, but has softened its stance towards the fossil technology in recent months. Earlier this month, the European Parliament even went so far as to brand nuclear and fossil gas “environmentally sustainable” under certain conditions.

But the EC hinted that the Hy2Tech collaboration has blue hydrogen - or "low carbon hydrogen" - in its sights as well as green.

"Its focus is the development of innovative technologies, which can subsequently enable the generation of the renewable and low carbon hydrogen quantities our economy requires in order to decarbonise industrial processes and economic sectors," a spokesperson told Recharge.

The state-aid allocation marks the first time a hydrogen IPCEI has been granted such a status, a development that prompted a warm welcome from the hydrogen industry.

“We are delighted to see the first wave of IPCEI projects being finally approved after an intense two-year process,” said Hydrogen Europe CEO Jorgo Chatzimarkakis.

“[These] pioneer projects carry big risk given the lack of a European market and infrastructure for hydrogen,” he added. “The sector needs to set up the whole hydrogen ecosystem from hydrogen production to transport, storage and end use applications. All this needs to be done in a synchronised manner, in record time and ensure it is commercially attractive to secure private investments. This is one challenging task!’’

UPDATED: to include comment from the EC and to reflect Enel's experience handling natural gas for its thermal plants