Brussels, 08/10/2008 (Agence Europe) - On Wednesday 8 October, the European Commission endorsed a €68 million aid that France plans to grant to Air Liquide, its subsidiary Axane and other partners for the development of a hydrogen energy chain (programme “H2E”). The programme, selected by the French Industrial Innovation Agency, aims to promote sustainable and diversified sources of energy, in line with EU objectives. Indeed, the EU supports the development of hydrogen energy through the European Hydrogen & Fuel Cell Technology Platform and the Joint Technology Initiative on Hydrogen. The proposed aid would entail important positive effects in terms of knowledge dissemination and environmental costs, while at the same time having a limited impact on competition. In a press release, the Commission says that market failures exist in every segment of the hydrogen energy chain (production, storage and distribution), where companies are reluctant to invest because of the high risks in a yet undeveloped market. When the market is unable to trigger R&D activity, well targeted state aid can create the right incentives for companies. In the case of H2E, the Commission felt that the planned aid would give the beneficiaries the incentive to launch the programme, which they would not have undertaken without public support. Moreover, the Commission found that the aid was proportionate and that it would not distort competition in way that was contrary to common interest. Given the limited size of the targeted markets, the penetration rate foreseen by Air Liquide and their development perspectives, there was no risk of crowding out competitors - hence its decision. (O.L./transl.rt)