European Commission allocates €5.4bn for hydrogen IPCEIs

LONDON (ICIS)–The European Commission announced funding for 41 hydrogen projects totalling €5.4bn of investment on 15 July.

The awards are the first projects funded under the Important Project of Common Interest (IPCEI) scheme for hydrogen and aim to support technological development of the hydrogen value chain under the strand IPCEI Hy2Tech.

A total of 35 companies across 15 member states will participate.

The projects can now receive state aid from member states, which allow for flexibility in how states can subsidise companies.

An additional €8.8bn of private-sector investment is expected to complement state-aid funds.

Projects will cover four key technology areas: hydrogen generation, fuel cells, storage, transportation and distribution, and end-user applications.

French projects led the board, with 10 companies winning funding. Italy placed second with six companies, followed by Austria, Germany and Spain with four each. Two companies each from Belgium, Estonia and Greece won funding.

The commission elected to support 21 projects on hydrogen generation, 17 on fuel cells, 13 on end-user projects and nine on transport and storage. Companies were funded to participate across more than one stream.

Most will participate across one or two areas, with Denmark’s Orsted and Germany’s Daimler Truck each active in three streams.

The IPCEI mechanism aims to bridge a gap between investment risk and breakthrough innovation, to kickstart areas of strategic importance to the European economy.

The mechanism also includes measure that allow member states to ‘claw back’ funding if projects generate significantly higher-than-expected revenues, to avoid overcompensation or market distortions.

Alongside developing Europe’s hydrogen value chain, the initiative will meet objectives under the EU’s Green Deal, Hydrogen Strategy and REPowerEU plan.

Further rounds of funding under the hydrogen IPCEI are expected to follow, with industrial projects due to be announced in autumn 2022. Further projects on infrastructure and mobility applications also in the works.

STATE FUNDING

The individual funding breakdowns were not released by the commission, but Germany’s BMWK, the ministry for economy and climate protection, announced the federal and state governments would provide more than €8bn for the entire IPCEI hydrogen scheme.

The Dutch government also recently tabled plans to accelerate budget allocations for projects, bringing forward around €1.4bn for the second and third waves of the IPCEI. This funding was previously expected to be spread between 2023-2027, but budgets must already be in place to qualify for IPCEI support. One Dutch project was selected in the first round.