European Commission approves €1.2 billion Spanish State aid scheme to support investments in the production of renewable hydrogen
The European Commission has approved a €1.2 billion Spanish scheme to support investments in the production of renewable hydrogen to foster the transition to a net-zero economy. The scheme was approved under the State aid Temporary Crisis and Transition Framework (‘TCTF'), adopted by the Commission on 9 March 2023 and amended on 20 November 2023 and on 2 May 2024.
Spain notified to the Commission, under the TCTF, a €1.2 billion scheme to support investments in the production of renewable hydrogen in hydrogen clusters or valleys to foster the transition towards a net-zero economy. The scheme will be fully funded through the Recovery and Resilience Facility (‘RRF') following the Commission's positive assessment of Spain's Recovery and Resilience Plan and its adoption by the Council.
The scheme will support investments in the production of renewable hydrogen with an installed capacity of at least 100 MW. Investments supported may encompass the production of renewable hydrogen-derived fuels, renewable hydrogen storage, and the production of renewable electricity. To be eligible under the measure, applicants should have secured agreements with off-takers to cover at least 60% of the renewable hydrogen or renewable hydrogen-derived fuel expected to be produced.
Under the scheme, the aid will take the form of direct grants covering the investment costs of the projects supported. The aid amount for each beneficiary will be determined on the basis of a competitive bidding process.
The Commission found that the Spanish scheme is in line with the conditions set out in the TCTF. In particular, the aid will be granted on the basis of a scheme with an estimated volume and budget; the aid amount will be determined through an open, clear, transparent and non-discriminatory competitive bidding process; and the aid will be granted before 31 December 2025.
The Commission concluded that the Spanish scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of the REPower EU Plan and the Green Deal Industrial Plan, in line with Article 107(3)(c) Treaty on the Functioning of the EU and the conditions set out in the TCTF.
