EU approves €1.3bn German renewable hydrogen scheme

The European Commission has approved a €1.3 billion German State aid programme to support the production of renewable hydrogen, marking another major step in Europe’s efforts to scale low-carbon hydrogen and accelerate industrial decarbonisation.

The scheme, notified by Germany under EU State aid rules, will support the construction of up to 1,000 MW of electrolyser capacity and enable production of up to 10 million tonnes of renewable hydrogen. The Commission estimates the programme could help avoid up to 55 million tonnes of CO₂ emissions.

Funding will be distributed through competitive bidding under the European Hydrogen Bank’s “Auctions-as-a-Service” mechanism, overseen by the CINEA. Successful developers will receive direct grants per kilogram of renewable hydrogen produced, with support lasting up to ten years.

The hydrogen produced will feed into expanding European infrastructure, including Denmark’s Hydrogen Backbone 1 pipeline and Germany’s Hydrogen Core Network, strengthening cross-border supply routes and supporting the development of a unified European hydrogen market.

The scheme is aligned with broader EU climate and energy strategies, including REPowerEU and the EU Hydrogen Strategy, both aimed at reducing dependence on imported fossil fuels and scaling domestic clean energy production.

The Commission said the programme is necessary to close the investment gap in renewable hydrogen, while ensuring competitive bidding mechanisms limit distortions to the internal market. It also highlighted that linking infrastructure across member states would improve long-term cost efficiency and market integration.

The initiative builds on previous European Hydrogen Bank auction rounds and follows similar approved schemes in Austria, Lithuania and Spain, as EU member states increasingly turn to coordinated subsidy frameworks to accelerate hydrogen deployment across the continent.