The European Commission has approved a €200 million German state aid scheme to support the production of renewable hydrogen and related synthetic fuels in Canada for import and sale in Germany and across the EU.
The scheme will back renewable fuels of non-biological origin (RFNBOs) — synthetic gaseous or liquid fuels made using renewable electricity and carbon dioxide — produced in Canada and shipped to the EU, the Commission informed on Thursday.
Germany said the €200 million budget is expected to unlock an additional €200 million in funding provided by Canada.
The aid is set to support the construction of up to 300 MW of electrolysis capacity, the Commission said, referring to the use of electricity to split water into hydrogen and oxygen.
Germany expects the scheme to lead to up to 2.47 million tonnes of CO2 equivalent avoided.
How the support will work
The scheme is based on a “double auction system” matching Canadian producers with EU buyers, with state funds covering the gap between offers when sellers propose lower prices and buyers bid higher prices, the Commission said.
Support will be awarded through a competitive bidding process planned to be concluded in 2027.
Companies receiving support will have to show they meet EU criteria for producing RFNBOs.
The approval follows two earlier Commission decisions in December 2021 and December 2024 backing German schemes supporting renewable hydrogen production in non-EU countries for sale in the EU.
