The European Commission has approved a €6 billion Italian state aid scheme to support the production of renewable hydrogen for transport and industry.
Italy told the Commission the scheme is intended to support production of 200,000 tonnes of renewable hydrogen per year. Hydrogen made using electrolysis — which uses electricity to split water into hydrogen and oxygen — will be eligible if powered by renewable electricity, the Commission informed on Monday.
Hydrogen produced from biogenic sources using biological, bio-thermochemical and thermochemical processes will also qualify under the measure.
Support will be provided through two-way contracts for difference, the Commission said. Under this system, a “strike price” for hydrogen will be set through a competitive bidding process.
If the price of an alternative fuel used by hydrogen customers falls below the strike price, Italy will pay hydrogen producers the difference.
If the alternative fuel price rises above the strike price, beneficiaries will pay the difference back to the Italian state.
How long the scheme will run
The scheme will run until 31 December 2029, according to the Commission.
“This scheme will support the production of renewable hydrogen in Italy for sectors where it can contribute the most to reducing emissions,” said Teresa Ribera, the Commission’s Executive Vice-President for Clean, Just and Competitive Transition.
