The European Commission has approved a French state aid scheme to support the production of renewable and low-carbon hydrogen using new electrolysers, under EU rules on government support for businesses.
France plans to back 1 GW of hydrogen electrolysis capacity, with funding awarded through competitive bidding across three tender rounds, the Commission announced on Monday.
Electrolysis is a process that uses electricity to split water into hydrogen and oxygen.
The first tender will cover 200 MW of electrolysis capacity and has an estimated budget of €797 million. Aid will be paid as a fixed premium, with contracts lasting 15 years.
Hydrogen made under the scheme must be sold only for direct industrial use, to limit hydrogen to cases where there is no economically viable option to electrify instead.
Projects will need to meet EU criteria for renewable fuels of non-biological origin — meaning fuels made from renewable electricity rather than from biomass — and for low-carbon fuels, based on EU delegated acts that set out the rules.
Focus on industrial use
France expects the scheme to help it reach 4.5 GW of electrolyser capacity by 2030 and 8 GW by 2035, according to the Commission.
The French government estimates the scheme could avoid up to 1,100 kilotons of CO2 each year.
The Commission said the scheme was assessed under Article 107(3)(c) of the EU treaty and the EU’s 2022 guidelines on state aid for climate, environmental protection and energy.
It added France had included safeguards such as an open and non-discriminatory bidding process and limits intended to keep support to the minimum needed.
