The European Commission (EC) has given the nod for EU member states to subsidise an array of hydrogen infrastructure projects combined as “Hy2Use” — including 3.5GW of electrolysis capacity — to the tune of €5.2bn ($5.2bn), the second time the Commission has sanctioned state-aid funding for hydrogen proposals en masse.
Hy2Use, which was granted the status of Important Project of Common European Interest (IPCEI) today (Wednesday), encompasses 35 projects across 13 countries in the bloc with a focus on boosting supply for industrial applications.
Among the projects from 29 companies are a variety of electrolyser plans that add up to 3.5GW in total.
IPCEI status effectively exempts Hy2Use from the usual EU restrictions on state aid, opening the door for billions of euros’ worth of investment. As well as funnelling €5.2bn of public money to the scheme, it will also unlock an additional €7bn in private funding, the EC says.
“The hydrogen value chain in Europe is in its infancy,” said the EC’s competition commissioner Margrethe Vestager. “This makes it risky for companies and member states to invest alone in such [an] innovative market. That is where state aid has a role to play to unlock, crowd-in and leverage substantial private investments that would otherwise not materialise.”
Hy2Use’s designation comes hot on the heels of the 41-project-strong Hy2Tech scheme, which was granted IPCEI status and €5.4bn in state aid funding in July.
Blue hydrogen?
But unlike Hy2Tech, which focused mainly on projects innovating across the hydrogen value chain as well as mobility applications, Hy2Use projects coalesce around hydrogen infrastructure such as pipelines, and end-use hydrogen applications, including the manufacture of cement, steel and glass.
Among the projects included in Hy2Use are Air Liquide’s hydrogen pipeline for the 10MW CurtHyl project and its 200MW ELYgator electrolyser-to-pipeline project, both in the Netherlands. Repsol’s Bay of Biscay Hydrogen project, which comprises an electrolyser in Bilbao connected to the company’s Petronor oil refinery, will also be in play for funding.
And on the end-use side, Hy2Use includes Sweden’s green-steel hydrogen project, Hybrit, Greece’s Titan Cement, and Italian renewable chemicals company NextChem.
The European Commission highlighted that Hy2Use will boost the supply of “renewable and low-carbon” hydrogen, implying that some of the Hy2Use projects will be utilising blue hydrogen made with fossil gas. However, specifics for each project and their funding under the scheme have not yet been revealed, and the European Commission had not responded to enquiries from Recharge at the time of writing.
The news comes as the EU is ratcheting up its support for hydrogen in the face of fierce criticism from the European sector, which accuses it of acting too slowly — enabling the US to overtake Europe as the number-one hydrogen market due to its generous tax credits of up to $3 per kg of H2.
Last week, the European Parliament scrapped plans for strict “additionality” rules, which would have forced green hydrogen producers to source electricity from dedicated supply.
And it also announced plans for a €3bn Hydrogen Bank, which is rumoured to be a vehicle through which the Commission can buy up —and resell — all Europe’s targeted hydrogen production by 2030.
