European Commission - Press release

Commission approves up to €6.9 billion of State aid by seven Member

States for the third Important Project of Common European Interest in the
hydrogen value chain
Brussels, 15 February 2024
The Commission has approved, under EU State aid rules, a third Important Project of Common
European Interest (‘IPCEI') to support hydrogen infrastructure. This IPCEI is expected to boost the
supply of renewable hydrogen, thereby reducing dependency on natural gas and helping to achieve
the objectives of the European Green Deal and the REPowerEU Plan.
The project, called “IPCEI Hy2Infra”, was jointly prepared and notified by seven Member States:
France, Germany, Italy, the Netherlands, Poland, Portugal, and Slovakia.
The Member States will provide up to €6.9 billion in public funding, which is expected to unlock €5.4
billion in private investments. As part of this IPCEI, 32 companies with activities in one or more
Member States, including small and medium-sized enterprises (‘SMEs'), will participate in 33
projects.
IPCEI Hy2Infra will cover a wide part of the hydrogen value chain by supporting:
i. the deployment of 3.2 GW of large-scale electrolysers to produce renewable hydrogen;
ii. the deployment of new and repurposed hydrogen transmission and distribution pipelines of
approximately 2,700 km;
iii. the development of large-scale hydrogen storage facilities with capacity of at least 370 GWh;
and
iv. the construction of handling terminals and related port infrastructure for liquid organic
hydrogen carriers ('LOHC') to handle 6,000 tonnes of hydrogen a year.

Participants will also collaborate on interoperability and common standards to prevent barriers
and facilitate future market integration. The IPCEI will support the gradual emergence of an EU-wide
hydrogen infrastructure starting from different regional clusters.
Several projects are expected to be implemented in the near future, with various large-scale
electrolysers expected to be operational between 2026 and 2028, and pipelines between 2027 and
2029 depending on the geographic area. The overall completion of projects is planned for 2029, with
timelines varying depending on projects and companies.
IPCEI Hy2Infra complements the first and second IPCEIs on the hydrogen value chain. The
Commission approved IPCEI “Hy2Tech” on 15 July 2022, which focuses on the development of
hydrogen technologies for end users. IPCEI “Hy2Use” was approved on 21 September 2022 and
focuses on hydrogen applications in the industrial sector. Hy2Infra concerns infrastructure
investments, which are not covered by the first two IPCEIs.
Commission assessment
The Commission assessed the proposed project under EU State aid rules, more specifically its
Communication on Important Projects of Common European Interest.
Where private initiatives supporting breakthrough innovation and the construction of large-scale
infrastructure of great EU importance fail to materialise because of the significant risks such projects
entail, IPCEI rules enable Member States to jointly fill the gap to overcome these market failures. At
the same time, the rules ensure that the EU economy at large benefits from the investments and
limit potential distortions to competition.
The Commission has found that the IPCEI Hy2Infra fulfils the required conditions set out in its
Communication. In particular, the Commission concluded that:
The project contributes to a common objective by supporting the deployment of hydrogen
infrastructure important for achieving the objectives of key EU policy initiatives such as the
European Green Deal, the REPowerEU Plan and the EU Hydrogen Strategy.
All 33 projects included in the IPCEI are highly ambitious, as they aim at developing
infrastructure that go beyond what the market currently offers. They will lay the first
building blocks for an integrated and open hydrogen network, accessible on non-discriminatory
terms, and enable the market ramp-up of renewable hydrogen supply in Europe. This will allow
for the decarbonisation of economic sectors that depend on hydrogen to reduce their carbon
emissions.
The IPCEI also involves significant financial risks. Therefore, public support is necessary to
provide incentives to companies to carry out the investments.
Aid to individual companies is limited to what is necessary and proportionate, and does
not unduly distort competition. In particular, the Commission has verified that the total
planned maximum aid amounts are in line with the eligible costs of the projects and their
funding gaps. Furthermore, if projects covered by the IPCEI turn out to be very successful,
generating extra net revenues, the companies will return part of the aid to the respective
Member State (claw-back mechanism).
The technical knowledge and experience acquired during the construction and first years of
operation of the projects will be widely shared by participating companies through
publications, conferences, and joint recommendations for the development of operational rules
and technical standards. As a result, positive spill-over effects will be generated
throughout Europe, beyond the companies and Member States that are part of the IPCEI.
On this basis, the Commission concluded that the project is in line with EU State aid rules.
Funding, beneficiaries and amounts
The IPCEI will involve 33 projects by 32 companies, including five SMEs. The participating
companies will closely cooperate with each other through numerous collaborations, as well as with
external partners, such as transmission system operators, potential offtakers, universities, research
organisations, and equipment suppliers across Europe, including SMEs.
The figure below presents the workstreams of Hy2Infra, including the individual projects.
Several Member States (France, Germany, Poland and Portugal) included their participation in the
IPCEI Hy2Infra in their Recovery and Resilience Plans and thus can partially fund some of their
projects through the Recovery and Resilience Facility.
More information on the amount of aid to individual participants will be available in the public version
of the Commission's decision, once the Commission has agreed with Member States and third parties
on any confidential business secrets that need to be removed.
Background
A statement of Executive Vice-President Margrethe Vestager on the approval of this IPCEI is available
here.
The Commission's approval of this IPCEI is part of the wider Commission efforts to support the
development of an innovative and sustainable European hydrogen industry.
The Commission published the REPowerEU plan on 18 May 2022, which sets out a series of measures
to rapidly reduce EU's dependence on Russian fossil fuels by accelerating the clean energy transition,
including a Hydrogen Accelerator. The Plan sets a target of 10 million tonnes of domestic renewable
hydrogen production and 10 million tonnes of imports by 2030, to replace natural gas, coal and oil in
hard-to-decarbonise industries and transport sectors. On 8 December 2023, the European Parliament
and Council have provisionally agreed on updated EU rules to create a hydrogen market that will
make a key contribution to the EU's efforts to reach climate neutrality by 2050. In July 2020, the
Commission published its EU Hydrogen Strategy, and launched the European Clean Hydrogen
Alliance, bringing together the European hydrogen community (industry, civil society, public
authorities). Jointly with the policy priorities set out in the European Green Deal, notably in terms of
environmental sustainability as well as the transition of industry and transport sectors to climate
neutrality, these initiatives played an important role for the objectives of the IPCEI Hy2Infra and
facilitated the creation of partnerships.
Today's decision concerns the eighth integrated IPCEI approved under EU State aid rules. It is
approved on the basis of the 2021 State aid IPCEI Communication, setting out criteria under which
several Member States can support transnational projects of strategic significance for the EU under
Article 107(3)(b) of the Treaty on the Functioning of the European Union. The Communication aims
at encouraging Member States to support highly innovative projects that make a clear contribution to
economic growth, jobs, and competitiveness or to support the construction of ambitious
infrastructure on condition that the projects receiving this funding are highly innovative, of European
relevance and do not cover mass production or commercial activities or – for infrastructure – that the
projects are ambitious, have a cross-border dimension and ensure open access. The Communication
also requires extensive spillover commitments, such as the dissemination of new knowledge
throughout the EU, as well as a detailed competition assessment to minimise any undue distortions
in the internal market.
The IPCEI Communication complements other State aid rules such as the Climate, Energy and
Environment Aid Guidelines, the General Block Exemption Regulation, and the Research,
Development and Innovation (R&D&I) Framework, which allow supporting innovative projects whilst
ensuring that potential competition distortions are limited.
As part of an effort to support a transparent, inclusive, and faster design of IPCEIs, the Commission
published, on 17 May 2023, a Code of Good Practices on DG Competition's dedicated IPCEI website.
In addition, the Commission has set up the Joint European Forum for Important Projects of Common
European Interests (JEF-IPCEI). The objective of the forum is to identify areas of strategic EU
interest for potential future IPCEIs and to increase the effectiveness of the IPCEI process. The JEF-
IPCEI brings together experts from Member States and the Commission services, as well as
representatives from the industry, academia, and other stakeholders where relevant.
The non-confidential versions of the decisions will be made available under the case numbers
SA.102821 (France), SA.102825 (Germany), SA.102815 (Italy), SA.102807 (The Netherlands),
SA.102810 (Poland), SA.103494 (Portugal), SA.102811 (Slovakia) in the State Aid Register on the
competition website once any confidentiality issues have been resolved. New publications of state aid
decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.
IP/24/789

Quotes:

"While the renewable hydrogen supply chain in Europe is still in a nascent phase, Hy2Infra will deploy the initial building blocks of
an integrated and open renewable hydrogen network. This IPCEI will establish the first regional infrastructure clusters in several
Member States and prepare the ground for future interconnections across Europe, in line with the European Hydrogen Strategy.
This will support the market ramp-up of renewable hydrogen supply and take us steps closer to making Europe the first
climate-neutral continent by 2050."
Margrethe Vestager, Executive Vice-President in charge of competition policy - 15/02/2024

"For a successful roll-out of renewable and low-carbon hydrogen, all pieces of the puzzle need to come together. With this new
Important Project of Common European Interest, 32 companies, including 5 SMEs, will invest in hydrogen infrastructure, for a
total of more than 12 billion euro of private and public investment, to match supply and demand of hydrogen. It provides
industries with more options to decarbonise their activities while boosting their competitiveness and creating jobs."
Commissioner Thierry Breton - 15/02/2024

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