The European Commission has granted approval under EU State aid rules for Germany’s ambitious €3 billion scheme aimed at establishing a Hydrogen Core Network (HCN). This initiative forms a pivotal part of the EU’s Hydrogen Strategy and ‘Fit for 55’ package, designed to accelerate the deployment of renewable hydrogen infrastructure across Europe.
Germany’s notified scheme outlines support for the construction of a domestic HCN, crucial for long-distance hydrogen transport within Germany and its integration into the broader European hydrogen backbone connecting multiple Member States. The HCN project involves repurposing existing gas pipelines for hydrogen transport and building new hydrogen pipelines and compressor stations.
Under the scheme, financing will be facilitated through State guarantees, enabling transmission system operators (TSOs) selected by Germany’s federal network agency, Bundesnetzagentur, to secure advantageous loans from the Kreditanstalt für Wiederaufbau (KfW), Germany’s national promotional bank. These loans, offered below market rates, will be reimbursed over a period ending in 2055, with initial lower tariffs to encourage early network use amid limited consumer uptake.
“The approval of Germany’s scheme marks a significant step towards enhancing our hydrogen infrastructure and advancing towards our climate goals,” commented Margrethe Vestager, Executive Vice-President of the European Commission responsible for competition policy. “A robust hydrogen network is essential for stimulating investments in clean energy and accelerating the green transition across Europe.”
The HCN project aligns with the EU’s strategic objectives under the European Green Deal and the ‘Fit for 55’ legislative package, which aim to achieve net-zero emissions by 2050 and a 55% reduction in greenhouse gas emissions by 2030. It complements the Important Project of Common European Interest (IPCEI) framework, specifically the ‘Hy2Infra’ initiative, approved earlier in 2024, to reinforce hydrogen infrastructure investments within Germany and the broader EU.
The Commission’s assessment under EU State aid rules, particularly 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, concluded that the German scheme is proportionate and necessary to accelerate investments in hydrogen transmission infrastructure. The scheme is expected to bolster the EU’s resilience against climate challenges and promote sustainable economic growth.
The European Commission’s decision underscores its commitment to supporting Member States in achieving ambitious climate targets through targeted and cost-effective State aid measures. The approval paves the way for enhanced cooperation in building a comprehensive European hydrogen market, crucial for achieving a sustainable and resilient energy future.
The non-confidential version of the Commission’s decision will be accessible under case number SA.113565 on the State aid register of the Commission’s Competition website.
This decision reflects the EU’s proactive stance in promoting clean energy infrastructure investments to foster economic growth and combat climate change effectively.
