The European Commission has approved a €400 million Austrian State aid scheme and a €36 million Lithuanian State aid scheme to support the production of renewable hydrogen. The funding will be allocated through the European Hydrogen Bank’s “Auctions-as-a-Service” tool, with the auction set to close in 2025.
The approved schemes align with the EU’s Clean Industrial Deal and the REPowerEU Plan, aiming to accelerate industrial decarbonization, reduce reliance on Russian fossil fuels, and support the EU Hydrogen Strategy.
Hydrogen Production Targets
Austria’s scheme will support the production of up to 112,000 tonnes of renewable hydrogen, while Lithuania’s initiative will facilitate the production of 13,000 tonnes. These efforts are expected to prevent approximately 536,000 tonnes and 61,000 tonnes of CO2 emissions, respectively.
The schemes will contribute to national hydrogen targets and the EU’s renewable fuels of non-biological origin (RFNBO) consumption goals in transport and industry, as set by the Renewable Energy Directive.
Competitive Bidding Process
The aid will be distributed through a competitive bidding process, scheduled for completion in the first quarter of 2025. The European Climate, Infrastructure, and Environment Executive Agency (CINEA) will oversee the process, assessing and ranking bids from companies planning to build new electrolysers in Austria and Lithuania.
The financial support will be provided as a direct grant per kilogram of renewable hydrogen produced, with a maximum funding period of ten years. Beneficiaries must adhere to EU regulations for RFNBO production, ensuring the additional renewable electricity required for hydrogen production is deployed or financed under the scheme.
EU Commission’s Assessment
The European Commission evaluated the schemes under EU State aid rules, specifically Article 107(3)(c) of the Treaty on the Functioning of the European Union and the 2022 Guidelines on State aid for climate, environmental protection, and energy (CEEAG).
The assessment concluded that:
The schemes are essential for increasing renewable hydrogen production and facilitating decarbonization in industry, transport, and energy sectors.
The financial aid serves as an incentive, as these investments would not proceed without public support.
Austria and Lithuania have implemented safeguards to minimize competition distortion within the EU, ensuring a transparent and non-discriminatory bidding process.
The positive environmental impact aligns with the European Green Deal and outweighs any potential market distortions.
Based on these findings, the European Commission approved the Austrian and Lithuanian State aid schemes, reinforcing the EU’s commitment to expanding renewable hydrogen production and supporting a greener energy transition.
