Spain’s ambition to become a key producer of “green” hydrogen, seen as a key element of Europe’s transition away from fossil fuels, has moved a step closer to reality with the EU’s approval of a major state aid.
Those responsible for Competition at the European Commission have given the green light to a public aid of 1,200 million euros for the emerging Spanish industry of the renewable hydrogenin a new boost to the country’s ambition to become one of the main producers of this climate-friendly fuel.
Under a plan that will be financed entirely from the Madrid part of the EU recovery fund created as a result of the pandemic, Production plants with a capacity equal to or greater than 100 megawatts may apply for state aid to develop “hydrogen valleys” throughout the country.
Green hydrogen is produced using renewable electricity -Spain has enormous untapped potential to increase solar and wind energy generation- to split water into its components oxygen and hydrogenwhich can be used directly as an energy vector or as raw material to produce synthetic liquid fuels with an almost zero carbon footprint.
When will the aid arrive?
State aid to be disbursed before the end of 2025 through a competitive bidding system. The EU allows deviations from its usually strict ban on national aid to domestic industry in cases where it furthers key EU policy objectives – in this case, the transition to a net zero economy– without unduly distorting the single market.
Margrethe Vestager, Vice-President of the Commission responsible for Competition Policy, stated that The Spanish regime will accelerate the creation of green hydrogen production facilities in line with the EU’s strategic objectives.
In a draft of its national energy and climate plan until 2030, which all EU members were due to present and which is being finalised, Spain’s goal of 11 gigawatts of electrolyzer capacity for the production of green hydrogen was the highest in Europe, and only Germany came close with 10 GW.
The actual EU production target is 10 million tonnes per year of green hydrogen by 2030although EU auditors warned last week that the target was unrealistic.
The trade association Hydrogen Europebased in Brussels and whose members range from oil multinationals with an eye on the production of hydrogen from natural gas to wind turbine manufacturers, welcomed the EU’s support for the Spanish aid plan.
“The Spanish announcement is further proof that The Iberian Peninsula is on its way to becoming a giant of the hydrogen economy“Jorgo Chatzimarkakis, General Director of the pressure group, told ‘Euronews’.
“It is very promising that the vice president of the Spanish Government who has presented these plans, Teresa Riberawill probably become a European commissioner, hopefully for climate or energy,” added the former German MEP.
