Commission approves €1.3 billion German State aid to support renewable hydrogen production

The European Commission has approved, under EU State aid rules, a €1.3 billion German State aid scheme to support the production of renewable hydrogen through the European Hydrogen Bank’s ‘Auctions-as-a-Service’ tool for the auction that closed in 2026. The scheme will contribute to the objectives of the Clean Industrial Deal to accelerate the decarbonisation of EU industry, the REPowerEU Plan to reduce dependence on Russian fossil fuels, as well as the EU Hydrogen Strategy.

Under the scheme, the aid will take the form of a direct grant per kilogram of renewable hydrogen produced. The aid will be granted for a maximum duration of ten years.

The Commission found that the scheme is necessary and appropriate to facilitate the production of renewable hydrogen and has an incentive effect. In addition, Germany put in place sufficient safeguards to ensure that the scheme has a limited impact on competition and trade within the EU. The Commission also concluded that limiting the eligibility of the scheme to projects that will feed renewable hydrogen into the Danish Hydrogen Backbone 1 pipeline and deliver it to buyers off-takers that are connected to the German Hydrogen Core Network does not unduly distort competition as this infrastructure will lower the cost of renewable hydrogen in the long term. Finally, the aid will bring about positive effects, in particular on the environment.

Executive Vice-President for a Clean, Just and Competitive Transition, Teresa Ribera, said: “This investment in renewable hydrogen production is a step towards Europe’s decarbonisation goals. The scheme will increase the supply of clean hydrogen and also support the building of cross-border infrastructure to connect production in the North Sea with industrial users elsewhere.”

Source: European Commission