EU Greenlights €1.2 Billion Scheme To Advance Spain’s Net-Zero Hydrogen Projects

The European Commission has given the green light to a €1.2 billion Spanish initiative designed to enhance investments in renewable hydrogen production, accelerating the country’s transition to a net-zero economy. The scheme received approval under the State aid Temporary Crisis and Transition Framework (TCTF), initially adopted on March 9, 2023, and subsequently amended in November 2023 and May 2024.

The Spanish government, under the TCTF, notified the Commission of its plans for a €1.2 billion scheme aimed at fostering investments in renewable hydrogen production within designated hydrogen clusters or valleys. This initiative will be fully financed through the Recovery and Resilience Facility (RRF) following a positive evaluation of Spain’s Recovery and Resilience Plan by the Commission and its subsequent adoption by the Council.

The scheme targets investments that establish at least 100 MW of installed capacity for renewable hydrogen production. Eligible investments include:

1. Production of renewable hydrogen-derived fuels
2. Renewable hydrogen storage
3. Production of renewable electricity

Applicants must secure agreements with off-takers for at least 60% of the renewable hydrogen or hydrogen-derived fuels anticipated to be produced. Financial aid will be provided as direct grants, covering the investment costs, and will be allocated based on a competitive bidding process.

Commission’s Findings

The Commission determined that the Spanish scheme aligns with the TCTF conditions, particularly in terms of:

1. Aid is granted based on a well-defined scheme with a specified volume and budget.
2. Aid amounts are determined through an open, transparent, and non-discriminatory competitive bidding process.
3. Aid is to be granted before December 31, 2025.

The Commission concluded that the scheme is essential, suitable, and proportional for accelerating the green transition and supporting key economic activities integral to the REPower EU Plan and the Green Deal Industrial Plan. Consequently, the scheme was approved under EU State aid rules.