EU approves €5.2bn funding for hydrogen use in metallurgy

The European hydrogen industry welcomed on Thursday the approval of a €5.2 billion ($5.12 billion) state aid for the region's hydrogen supply chain.

“We are pleased to see that the second wave of IPCEI projects has been approved. These projects come at an ideal moment as we seek to reduce our dependence on fossil fuels,” says Yorgo Chatzimarkakis, CEO of trade organization Hydrogen Europe.

Support provided under the second major project of common European interest (IPCEI), Hy2Use, was approved by the European Commission on 21 September. It was prepared by 13 countries and will fund 35 projects led by 29 companies including Air Liquide, Engie, Repsol, Fluxys, Iberdrola, Shell, Uniper, Everfuel, Hybrid Development and Enel.

The EC believes that public funding will open up an additional 7 billion euros to private investment. It is to develop a large 3.5 gigawatt electrolyzer to produce 340,000 tons of green hydrogen per year, as well as related storage and transportation capacities.

In addition, the scheme will support the development of innovative technologies for integrating hydrogen into industrial processes such as steel production. The ultimate goal is to accelerate decarbonization and reduce dependence on natural gas supplies.

“The industry's risk reduction efforts remain a key challenge to secure the private investment needed to rapidly reduce the EU's dependence on fossil fuels and accelerate emissions reductions. Now that two IPCEIs have been notified, and more, we look forward to increasingly ambitious cooperation among European Member States,” Chatzimarkakis adds.

In July, the first wave of funding for Hy2Tech was announced for up to €5.4bn, which is expected to attract €8.8bn of private investment. Two new IPCEI funding schemes are expected to help Europe's energy transition.

Hydrogen Europe notes that the large-scale deployment of efficient hydrogen schemes will pave the way for future projects to be developed faster and at lower cost.

The EC expects that by 2024-2026. various electrolyzers will be put into operation, and by 2026-2027. - innovative technologies. The overall completion of Hy2Use is projected by 2036.