EU Approves €400 Million Spanish Aid Scheme to Boost Renewable Hydrogen Production

The European Commission has officially approved a €400 million State aid scheme proposed by Spain to accelerate renewable hydrogen production through the European Hydrogen Bank’s “Auctions-as-a-Service” tool, with the auction set to close in 2025.

The initiative aligns with the EU’s Clean Industrial Deal and REPowerEU Plan, reinforcing efforts to decarbonise the industrial sector, cut reliance on Russian fossil fuels, and fast-track the green transition in line with the EU Hydrogen Strategy.

Project Scope: Up to 345 MW Electrolyser Capacity, 221,000 Tonnes Hydrogen Production

Spain’s proposed scheme will support the development of up to 345 megawatts of new electrolyser capacity, targeting the annual production of 221,000 tonnes of renewable hydrogen. This is expected to offset up to one million tonnes of CO₂ emissions.

The project also supports Spain’s broader national target of achieving 12 gigawatts of electrolyser capacity by 2030, and contributes towards meeting EU-wide goals for renewable fuels of non-biological origin (RFNBOs) under the Renewable Energy Directive.

Grants and Eligibility

Aid will be distributed via a competitive bidding process concluded in Q1 of 2025. The European Climate, Infrastructure, and Environment Executive Agency (CINEA) will oversee the process, which is open to companies planning to build new electrolyser projects within Spain.

Selected projects will receive direct grants per kilogram of hydrogen produced, valid for a period of up to ten years. Beneficiaries must comply with EU RFNBO standards, including demonstrating the use or financing of additional renewable electricity to produce the hydrogen.

Commission’s Assessment and Approval

The Commission evaluated the aid scheme under 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).

It concluded that the scheme:

• Is necessary and proportionate to promote renewable hydrogen and reduce industrial emissions.
• Has a clear incentive effect, as projects would not proceed without public support.
• Maintains fair competition, with an open and transparent bidding process ensuring minimal market distortion.
• Delivers significant environmental benefits that outweigh potential competitive concerns, aligning with the European Green Deal.

The Commission’s green light marks a significant milestone in the EU’s hydrogen rollout, paving the way for clean energy innovation and industrial sustainability across the bloc.