EU Commission approves €220M to support Spanish renewable hydrogen

The European Commission has approved, under EU State aid rules, a €220 million Spanish measure to support Cobra Instalaciones y Servicios, S.A. (COBRA) in producing renewable hydrogen, to promote its use in industrials sectors.

The measure contributes to achieving the EU Hydrogen Strategy and the European Green Deal targets while helping reduce dependence on Russian fossil fuels and fast forward the green transition in line with the REPowerEU Plan.

COBRA’s project was selected by Spain in the context of an open call to form part of an IPCEI on hydrogen technologies and systems, which resulted in the two approved IPCEIs. However, given its characteristics and objectives, it was better suited for assessment under the Guidelines on State aid for climate, environmental protection and energy 2022.

Spain notified the Commission of its plan to support COBRA, which is not yet active in hydrogen production, to start producing renewable hydrogen at a large scale via water electrolysis (i.e., using electricity to decompose water into oxygen and hydrogen gas). The renewable hydrogen produced will be used for external industrial off-takers, particularly in energy-intensive and hard-to-abate sectors such as refineries and ceramics.

The aid, which will take the form of a direct grant, will support the construction and installation of electrolysers in Spanish regions of Cartagena and Castellón. The two electrolysers will have a total capacity of 205 MW and are expected to produce approximately 8,550 tonnes of renewable hydrogen and 6,840 tonnes of oxygen per year. The electrolysers are envisaged to be constructed in stages, with the first electrolyser operating as of 2023.

Once completed, the project is expected to avoid the release of 47,038 tonnes of carbon dioxide annually. In addition, to maximise the reduction of greenhouse gas emissions, the generated hydrogen will be produced solely with electricity stemming from renewable sources.

Margrethe Vestager, EVP in charge of competition policy, said, “This €200 million measure enables Spain to support COBRA’s plans to establish new renewable hydrogen production capacities.”