EC approves €400 million in aid to Spain for green hydrogen production

The financing supports projects within the Hydrogen Bank and will contribute to the decarbonization of industry

The European Commission (EC) has approved €400 million in state aid to Spain for the development of renewable hydrogen production. The funds are allocated under the Auctions-as-a-Service mechanism of the European Hydrogen Bank, which aims to support the “green” transition and reduce dependence on fossil fuels. This is stated in the EC press release.

According to the plan, the financing will allow to build up to 345 MW of electrolysis capacity and produce up to 221 thousand tons of renewable hydrogen. This is expected to help avoid emissions of about one million tons of CO2. The initiative will also contribute to the Spanish goal of installing 12 GW of electrolyzers by 2030.

The support will be provided in the form of a direct subsidy for each kilogram of hydrogen produced for a maximum of ten years. Projects must comply with EU requirements for renewable fuels of non-fossil origin (RFNBO), in particular for electricity sources.

The selection procedure is coordinated by the European Agency for Climate, Infrastructure and Environment (CINEA). All applications are evaluated on a competitive basis, which ensures transparency and minimizes the impact on competition in the EU.

The scheme is part of a broader effort under REPowerEU and the EU Green Deal and follows similar initiatives already approved for Germany, Austria and Lithuania.

The European Commission has recently approved a €5 billion program for Germany to help companies subject to the EU Emissions Trading Scheme (ETS) decarbonize their production processes. The assistance will be provided in the form of bilateral carbon contracts for 15 years.