EC approves €550 million for decarbonization of Italy’s carbon-intensive sectors

The scheme is designed to support investments in the use of hydrogen in industrial processes

The European Commission has approved an Italian scheme worth €550 million to support investments in the use of hydrogen in industrial processes. This is stated in the report of the institution.

Under the measure, which will be funded by resources allocated for the Italian National Recovery and Resilience Plan (PNRR), assistance will take the form of direct grants.

According to Margrethe Vestager, EC Executive Vice-President responsible for competition policy, the €550 million Italian scheme will, in particular, help the country reduce its dependence on fossil fuel imports in line with the REPowerEU plan and ensure a full transition to hydrogen by 2036 in all supported investments.

The Italian government will provide this support to industries that are difficult to decarbonize from a technological and economic point of view, such as steel, paper, glass, and others. The funds will be available until the end of 2025 and will be used to replace fossil fuels with green hydrogen.

In March 2023, the Italian Ministry of Environment and Energy Security (MASE) issued a public announcement on the selection of industrial decarbonization projects under the relevant PNRR program.

According to the EC’s decision, companies that submitted projects before the end of the call, i.e. by June 30, 2023, will have to adapt their project proposals to the requirements set out in the European act.

«The green light from the European Commission for the assistance program initiated by the Ministry aimed at replacing fossil fuels with renewable hydrogen in industrial sectors that are difficult to decarbonize is an important step towards the energy transition,» commented Minister of Environment and Energy Security Gilberto Pichetto.

As GMK Center reported earlier, the decarbonization of the steel industry will continue to be a key topic in 2024, according to Fastmarkets’ forecast. Adequate supply of clean hydrogen and renewable energy at competitive prices will be crucial in this process. Current hydrogen prices are around €5/kg, but they need to be much lower to become commercially viable for steelmaking.