EC approves up to $5.15 bil state aid for second cluster of hydrogen value chain projects

The European Commission has approved up to Eur5.2 billion ($5.15 billion) of state aid proposed by 13 EU member states for the IPCEI Hy2Use cluster of hydrogen value chain projects, the EC said Sept. 21.

The projects, focused on industrial applications, involves large electrolyzers, transport infrastructure and technologies designed to integrate hydrogen into hard-to-abate sectors such as steel, cement and glass, the commission said.

"The hydrogen value chain in Europe is in its infancy. 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 materialize," said EC Executive Vice-President and Competition Commissioner Margrethe Vestager.

Across 39 projects involving 29 companies, IPCEI Hy2Use would boost supply of renewable and low-carbon hydrogen, reducing dependency on natural gas, the EC said.

Austria, Belgium, Denmark, Finland, France, Greece, Italy, the Netherlands, Poland, Portugal, Slovakia, Spain and Sweden are sponsoring the project, providing up to Eur5.2 billion in public funding while unlocking a further Eur7 billion in private investment, it said.

This is the second cluster of hydrogen projects cleared by the EC's competition services under the Important Project of Common European Interest (IPCEI) framework.

On July 5 it approved Eur5.4 billion of support for 41 hydrogen production and infrastructure projects under the IPCEI Hy2Tech moniker, with this cluster focused on end-users in the mobility sector.

The price of European hydrogen (the Netherlands, PEM electrolysis) averaged Eur29.81/kg in August, according to S&P Global Commodity Insights. This was 34% higher than in July and was boosted by soaring power feedstock prices. As of Sept. 20, the assessment had dropped to Eur23.52/kg.

IPCEI Hy2Use: 39 projects across 13 member states

Source: European Commission