Deutsche ReGas announced on Wednesday that it will receive €112 million ($126.97 million) in public grants from the European Union's Hydrogen Bank for a renewable hydrogen project located in Lubmin on Germany's Baltic Sea coast.
The funding is part of the EU's initiative to promote electrolysis processes utilizing carbon-free electricity, aiming to stimulate a local economy centered around hydrogen production as an alternative to fossil fuels.
According to Deutsche ReGas, the hydrogen production at the Lubmin facility, with funding distributed over a ten-year period, has the potential to reduce carbon dioxide (CO₂) emissions by 1.6 million tonnes.
The EU subsidy is intended to bridge the cost gap between green hydrogen production and conventional energy prices. This funding was allocated through a €992 million auction, the second conducted by the Hydrogen Bank, wherein 15 projects across five countries received financial support, as stated by Deutsche ReGas.
Deutsche ReGas, a private developer and operator of energy infrastructure—including floating storage and regasification units and hydrogen electrolysers—plans to leverage the Lubmin plant's proximity to offshore wind energy sources and Baltic Sea water, which can be utilized in the electrolysis process for hydrogen production.
The facility is also strategically located near power transmission grids and a forthcoming hydrogen core transport network, scheduled to commence operations between 2025 and 2032.
Previously, Deutsche ReGas operated a floating liquefied natural gas (LNG) reception terminal in Lubmin following the 2022 energy crisis but has since relocated its LNG operations to develop a terminal in the nearby German port area of Mukran on Rügen island.
"From the very beginning, our goal was to secure energy supply and, at the same time, to push forward the energy transition," stated Ingo Wagner, Managing Director of Deutsche ReGas.
Grant agreements for the hydrogen projects selected in this EU auction round are anticipated to be signed by September or October, according to an EU document provided by Deutsche ReGas.
Deutsche ReGas is a private German energy infrastructure company specializing in the development and operation of liquefied natural gas (LNG) terminals and hydrogen electrolysis facilities.
Höegh LNG is a Norwegian company that owns and operates floating storage and regasification units (FSRUs) for liquefied natural gas.
PtX Development GmbH is a German company focused on initiating and developing industrial sites for green hydrogen production.