The European Commission has given its approval to a €1.2 billion Spanish aid scheme aimed at bolstering investments in renewable hydrogen production. This initiative is part of a broader strategy to transition towards a net-zero economy, aligning with the EU’s ambitious Green Deal and REPower EU Plan. The scheme was approved under the State aid Temporary Crisis and Transition Framework (TCTF), which was adopted in March 2023 and subsequently amended in November 2023 and May 2024.
Details of the Spanish Scheme
The Spanish government notified the Commission of its plan to allocate €1.2 billion to support renewable hydrogen production in designated hydrogen clusters or valleys. This funding will be sourced entirely from the Recovery and Resilience Facility (RRF), following the Commission’s positive assessment of Spain’s Recovery and Resilience Plan and its adoption by the Council.
The scheme is designed to support investments in renewable hydrogen production with a minimum installed capacity of 100 MW. Eligible investments include the production of renewable hydrogen-derived fuels, renewable hydrogen storage, and the generation of renewable electricity. To qualify, applicants must secure agreements with off-takers to cover at least 60% of the expected renewable hydrogen or derived fuel production.
The aid will be disbursed as direct grants, covering the investment costs of the supported projects. The specific aid amount for each beneficiary will be determined through a competitive bidding process, ensuring transparency and non-discrimination.
Commission’s Assessment
The Commission found that the Spanish scheme meets the conditions set out in the TCTF. Specifically, the aid will be granted based on a predefined scheme with an estimated volume and budget, the aid amount will be determined through an open and transparent competitive bidding process, and the aid will be granted before 31 December 2025.
The Commission concluded that the scheme is necessary, appropriate, and proportionate to accelerate the green transition and facilitate the development of key economic activities aligned with the REPower EU Plan and the Green Deal Industrial Plan. This decision is in line with Article 107(3)(c) of the Treaty on the Functioning of the EU and the conditions set out in the TCTF.
Background on TCTF
The TCTF, adopted on 9 March 2023, aims to foster support measures in sectors crucial for transitioning to a net-zero economy, as outlined in the Green Deal Industrial Plan. The framework allows Member States to implement various aid measures until 31 December 2025 to accelerate the green transition. These measures include support for renewable energy rollout, industrial decarbonisation, and investments in critical sectors for the net-zero transition.
Statement from Margrethe Vestager
Margrethe Vestager, Executive Vice-President in charge of competition policy, stated, “This €1.2 billion scheme will enable Spain to accelerate the deployment of renewable hydrogen capacities, in line with the EU Hydrogen Strategy and the European Green Deal. The scheme will also help Spain reduce its dependence on imported fossil fuels while minimising any potential distortions to competition.”
