Spain Advances in Green Hydrogen Race with EU's Approval of Major State Aid

Spain’s ambition to become a leading producer of 'green' hydrogen, a crucial element in Europe's transition away from fossil fuels, has taken a significant step forward. The European Union has approved substantial state aid to support this initiative.

The European Commission has sanctioned €1.2 billion in government support for Spain’s emerging renewable hydrogen industry. This approval reinforces Spain’s goal of becoming a key player in the production of this environmentally friendly fuel.

The financial support, derived entirely from Madrid’s share of the EU recovery fund established post-COVID-19, will be available for production plants with a capacity of 100 megawatts or more. These plants can apply for aid to develop 'hydrogen valleys' across Spain.

Green hydrogen is produced using renewable electricity to split water into oxygen and hydrogen. Spain’s vast potential for increasing solar and wind power generation positions it well to capitalize on this technology. The hydrogen produced can be used directly as an energy source or as a feedstock for creating synthetic liquid fuels with a minimal carbon footprint.

The state aid will be distributed by the end of 2025 through a competitive bidding process. The EU permits exceptions to its strict rules against national support for domestic industries when such aid advances key EU policy objectives, such as transitioning to a net-zero economy, without significantly distorting the single market.

Margrethe Vestager, Commission Vice-President in charge of competition policy, stated that the Spanish scheme aligns with EU strategic goals by accelerating the development of green hydrogen production facilities.

“The scheme will also help Spain reduce its dependence on imported fossil fuels, while minimising any potential distortions to competition,” Vestager said.

In its draft national energy and climate plan for 2030, Spain has set a target of 11 gigawatts of electrolyser capacity for green hydrogen production, the highest in Europe, with Germany closely following at 10 GW. The EU’s current production target is 10 million tonnes of green hydrogen annually by 2030, although EU auditors have recently expressed doubts about the feasibility of this goal.

Hydrogen Europe, a Brussels-based trade association whose members include petroleum multinationals and wind turbine manufacturers, praised the EU’s endorsement of Spain’s support scheme.

“The Spanish announcement is yet more proof that the Iberian Peninsula is on its way to becoming a giant in the hydrogen economy,” said Jorgo Chatzimarkakis, CEO of Hydrogen Europe, in a statement to Euronews.

“It’s very promising that Spanish Vice Prime Minister Teresa Ribera, who has been instrumental in advancing these plans, may become a European commissioner, potentially for climate or energy,” added the former German MEP.

Article source: https://www.euronews.com/green/2024/07/26/spain-in-pole-position-for-green-hydrogen-race-as-eu-approves-massive-state-aid

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