The European Commission has approved France’s plan to support the production of renewable low-carbon hydrogen, in line with the objectives of the EU Hydrogen Strategy and the Clean Industries Agreement.
France has notified the European Commission of its plans to introduce a scheme to support the production of renewable low-carbon hydrogen using new electrolyzers to reduce industrial greenhouse gas emissions.
It will also contribute to the REPowerEU plan’s goals of reducing Russia’s dependence on fossil fuels and accelerating a clean transition.
Production of renewable low-carbon hydrogen by electrolysis
The plan will support the construction of 1 GW of hydrogen electrolysis capacity and will be awarded through a competitive bidding process planned over three bidding rounds.
The first tender is for 200 MW of electrolysis capacity, with an estimated budget of €797 million.
Low-carbon hydrogen produced under this plan will be sold only for direct industrial use, limiting the use of hydrogen where economically viable electrification alternatives do not exist.
Achieving France’s climate goals
The plan will contribute to France’s efforts to achieve electrolyzer capacity of 4.5GW by 2030 and 8GW by 2035.
France expects the scheme to save up to 1,100 kilotonnes of CO2 per year, contributing to France’s achievement of EU climate change targets.
Teresa Rivera, Executive Vice President of Clean, Fair and Competitive Transition, explained:
“Hydrogen will play a strategic role in the decarbonization of sectors where electrification alone is not sufficient.”
Committee evaluation
The European Commission assessed the system on the basis of EU countries’ rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the European Union, which allows member states to support the development of certain economic activities under certain conditions.
In particular, the committee found that:
This plan is necessary and appropriate to promote the production of renewable, low-carbon hydrogen and, in turn, the decarbonization of the industrial sector. At the same time, it supports the goals of key EU policy initiatives such as the Clean Industries Pact, the EU Hydrogen Strategy and the REPower EU plan. This aid has an “incentive effect” because the production of renewable low-carbon hydrogen remains more expensive than the production of fossil hydrogen, and beneficiaries will not implement projects without public support. France has put in place sufficient safeguards to ensure that this system has a limited impact on competition and trade within the EU. In particular, beneficiaries will be selected following an open, transparent and non-discriminatory bidding process, and assistance will be reduced to the minimum necessary to implement the project. This aid will have positive effects, particularly on the environment, that will outweigh any possible negative effects in terms of distortions to competition.
“This aid will support the most cost-effective projects while minimizing competition and trade distortions in the domestic market,” Rivera concluded.
Source link
