On Friday 15 July, the European Commission authorised an important project of common European interest (‘IPCEI’) to support research and innovation and the first industrial deployment in the hydrogen technology value chain.
The IPCEI, entitled ‘Hy2Tech’, was jointly prepared and notified by fifteen Member States: Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Italy, Netherlands, Poland, Portugal, Slovakia and Spain.
The Member States will provide up to €5.4 billion in public funding, which is expected to leverage an additional €8.8 billion in private investments. As part of this IPCEI, 35 companies with activities in one or more Member States, including small and medium-sized enterprises (‘SMEs’) and start-ups, will participate in 41 projects.
Speaking to the press, Margarethe Vestager, executive vice-president for competition policy, said that hydrogen “has huge potential going forward. Russia’s unprovoked and unjustified military aggression against Ukraine has only underlined the need for Europe to diversify its energy sources and fast-forward the green transition. Among the many technologies required, hydrogen proves to be an indispensable component”.
Currently, there is no established hydrogen market in Europe. It is therefore risky for companies or even Member States to invest in these innovative technologies alone. “That is where State aid has a role to play to unlock, crowd-in and leverage substantial private investments that would otherwise not materialise”, said Vestager.
The IPCEI will cover a wide part of the hydrogen technology value chain, including the generation of hydrogen, fuel cells, storage, transportation and distribution of hydrogen, and end-users applications, in particular in the mobility sector. It is expected to contribute to the development of important technological breakthroughs, including new highly efficient electrode materials, more performant fuel cells, innovative transport technologies, among which first time roll out hydrogen mobility ones. The IPCEI is expected to create approximately 20.000 direct jobs.
The Commission assessed the proposed project under EU State aid rules and, in particular, under the Commission's Communication on important projects of common European interest.
It noted that the IPCEI Hy2Tech contributes to a common goal by supporting a strategic value chain that is essential for Europe’s future and the objectives of key EU initiatives such as the Green Deal, the EU Hydrogen Strategy and REPowerEU.
The 41 IPCEI projects are very ambitious, as they aim to develop technologies and processes that go beyond what the market currently offers and will bring major improvements in terms of performance, safety, environmental impact and cost-effectiveness.
The IPCEI also involves significant technological and financial risks, so public support is needed to encourage companies to make the investments. The aid granted to each company is limited to what is necessary and proportionate, and does not unduly distort competition.
In particular, the Commission ensured that the maximum total amount of aid foreseen did not exceed the eligible costs of the projects and the financing gaps. In addition, if large-scale IPCEI projects prove to be very successful, because they generate additional net revenues, the companies will return part of the aid to the respective Member States (recovery mechanism).
The participating companies benefiting from public support will share the results of the project widely with the European scientific and business community, not limited to the companies and countries that are part of the IPCEI. As a result, positive knock-on effects will be generated throughout Europe. (Original version in French by Lionel Changeur)