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EU Policy. Brussels green lights €1.4bn in state subsidy for hydrogen projects

French President Emmanuel Macron, center right, and Airbus CEO Guillaume Faury, look at a concept hybrid-hydrogen aircraft, at the Paris Air Show last year
French President Emmanuel Macron, center right, and Airbus CEO Guillaume Faury, look at a concept hybrid-hydrogen aircraft, at the Paris Air Show last year Copyright Michel Euler/Copyright 2023 The AP. All rights reserved.
Copyright Michel Euler/Copyright 2023 The AP. All rights reserved.
By Robert Hodgson
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The European Commission hopes to further boost EU clean energy technology by approving whopping state subsidies for a range of projects aimed at using hydrogen to replace fossil fuels in tranport.

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Airbus, BMW and Michelin are among 11 companies set to receive millions in public subsidy to develop low-carbon hydrogen technology after EU competition officials approved a whopping package of state aid for an ‘important project of common European interest’ (IPCEI).

The Hy2Move project, which as its name implies is intended to develop transport fuels, was prepared jointly by Estonia, France, Germany, Italy, Netherlands, Slovakia and Spain, who requested an exemption from single market rules that normally prohibit national subsidies.

It is hoped the state aid will be matched by €3.3bn in private sector investment into projects such as developing fuels cells sufficiently powerful for use in ships and trains, and lightweight hydrogen tanks that can safely store the explosive gas for use as an aviation fuel.

Although it named the companies involved – also including smaller firms such as Slovak light aircraft maker Tomark and Estonian energy storage firm Skeleton – the Commission said it was unable to reveal details of the specific projects for which state aid has been approved until it has agreed “on any confidential business secrets that need to be removed”.

Hy2Move is the fourth green hydrogen-related IPCEI to be approved after projects related to technology development, new real-world applications and infrastructure, and brings the total approved state subsidies to €18.9bn.

Margrethe Vestager, the European Commission vice-president responsible for competition policy, said hydrogen could help decarbonise transport, but that up-front investment could be “risky for one state or one company alone”. She stressed that the anticipated private sector investment was a concrete figure based on calls for expressions of interest and agreements within the member states concerned, and not merely an expression of hope.

The upsurge of attention to hydrogen as a potential solution for decarbonising transport and heavy industry has led to talk of ‘hydrogen hype’, and even Commission officials have expressed doubts about meeting the 2030 annual production target of 10 million tonnes of green hydrogen.

Under a recently adopted package of gas market rules, the European Commission has yet to develop legal criteria for ‘low-carbon hydrogen’, which NGOs warned last month must be robust enough to ensure ‘blue’ hydrogen made from natural gas is a genuinely climate friendly, and not merely a means of prolonging demand for the fossil fuel.

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