The European Commission has approved a €400 million Spanish State aid scheme to support the production of renewable hydrogen through the European Hydrogen Bank’s ‘Auctions-as-a-Service’ tool for the auction closing in 2025.
According to the Commission, the scheme will contribute to the objectives of the Clean Industrial Deal to accelerate the decarbonization of EU industry while strengthening its competitiveness, of the REPowerEU Plan to reduce dependence on Russian fossil fuels and accelerate the green transition, as well as the EU Hydrogen Strategy.
As disclosed, it will support the construction of up to 345 megawatts (MW) of installed electrolyzer capacity and the production of up to 221,000 tonnes of renewable hydrogen in Spain. This is estimated to result in the avoidance of the equivalent of up to one million tonnes of CO2.
The scheme will reportedly help Spain achieve its national objective to install 12 gigawatts (GW) of electrolyzer capacity by 2030, as well as the targets for the share of renewable fuels of non-biological origin (RFNBOs) consumed in transport and in industry that are set in the Renewable Energy Directive.
The Commission said the aid will be awarded through a bidding process that concluded in the first quarter of 2025, adding that it will take the form of a direct grant per kilogram of renewable hydrogen produced.
It is understood that the aid will be granted for a maximum duration of ten years, and the beneficiaries will have to prove compliance with EU criteria for the production of RFNBOs.
To note, under the ‘Auctions-as-a-Service’ concept, European Union’s (EU) Member States may choose to use the EU-wide auction mechanism under the Innovation Fund to allocate a pre-defined amount of national funding to renewable hydrogen production projects on their territory.
Through this tool, the Commission approved the German scheme in April 2024, as well as the Austrian and Lithuanian schemes in March 2025.
Spain announced its participation in the ‘Auctions-as-a-Service’ scheme for the 2024/2025 auction in November 2024.
In other news, it is worth mentioning that in July 2024, the Commission approved a €1.2 billion Spanish scheme set to support investments in the production of renewable hydrogen with an installed capacity of at least 100 MW. These investments may encompass the production of renewable hydrogen-derived fuels, renewable hydrogen storage and the production of renewable electricity.