On Wednesday 21 September the European Commission authorised a second important project of common European interest (IPCEI) to support research and innovation, early industrial deployment and the construction of relevant infrastructure in the hydrogen value chain.
The project, entitled ‘IPCEI Hy2Use’, was jointly developed and notified by 13 Member States: Austria, Belgium, Denmark, Finland, France, Greece, Italy, the Netherlands, Poland, Portugal, Slovakia, Spain and Sweden.
Member States will provide up to €5.2 billion in funding, which is expected to leverage an additional €7 billion in private investment. As part of this IPCEI, 29 companies with activities in one or more Member States, including small and medium-sized enterprises (‘SMEs’) and start-ups, will participate in 35 projects.
The Hy2Use IPCEI will cover a large part of the hydrogen value chain by supporting:
- the construction of hydrogen-related infrastructure (large electrolysers and transport infrastructure for the production, storage and transport of renewable and low-carbon hydrogen);
- the development of innovative and more sustainable technologies for the integration of hydrogen into industrial processes in several sectors (including steel, cement and glass).
The IPCEI is expected to boost the supply of renewable and low-carbon hydrogen, thereby reducing dependence on natural gas supply.
Several projects are expected to be implemented in the near future, with a number of large electrolysers expected to be operational by 2024-2026 and many innovative technologies deployed by 2026-2027. Completion of the overall project is scheduled for 2036, with varying timetables depending on the project and the companies involved.
Norway, as a member of the European Economic Area, is also participating in the ‘Hy2Use’ IPCEI with two individual projects. The EFTA Surveillance Authority is responsible for assessing State aid notified by Norway.
The ‘Hy2Use’ IPCEI is a continuation and complement to the first IPCEI on the hydrogen value chain, the ‘Hy2Tech’ IPCEI, approved by the Commission on 15 July 2022 (see EUROPE 12994/8). While both IPCEIs address the hydrogen value chain, Hy2Use focuses on projects that are not covered by Hy2Tech, namely hydrogen infrastructure and hydrogen applications in the industrial sector (while Hy2Tech focuses on end-users in the mobility sector).
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.
The Commission concluded that the 35 IPCEI projects are extremely ambitious, as they aim to develop technologies and infrastructure that go beyond what the market currently offers and will bring major improvements in terms of performance, safety, environmental impact and cost-effectiveness.
The project also involves significant technological and financial risks. Therefore, 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 total amount of maximum planned aid did not exceed the eligible costs of the projects and the funding gaps. In addition, if large-scale IPCEI projects turn out to be very successful, because they generate additional net revenues beyond those foreseen, the companies will return part of the aid to the respective Member States (claw-back mechanism).
The investments approved under this framework will allow for the construction of “about 3.5 Gigawatts of new electrolysis capacity, resulting in an output of about 340,000 tonnes of renewable and low-carbon hydrogen per year, which will contribute to decarbonising some of the most polluting sectors in Europe”, commented Commission Vice-President Margrethe Vestager. (Original version in French by Lionel Changeur)