The European Commission approved, on April 3rd, a €450 million Italian scheme to support the production of renewable hydrogen with the aim to foster the transition to a net-zero economy, in line with the Green Deal Industrial Plan.
The European Union has recently adopted a number of measures to aid decarbonization. For example, on March 16th, the European Commission proposed the Net-Zero Industry Act to scale up manufacturing of clean technologies in the EU and make sure the Union is well-equipped for the clean-energy transition. In addition, on 22nd March, EU agreed to the world’s first green shipping fuels law in favor of at least 2% mandate for green shipping fuels by 2025, compared to the latest agreement of a mandate by 2030.
The Italian measure
Italy notified to the Commission, under the Temporary Crisis and Transition Framework, a €450 million scheme to support investments in the integrated production of renewable hydrogen and renewable electricity in brownfield industrial areas to foster the transition to a net-zero economy.
The measure, financed under the Recovery and Resilience Facility (‘RRF’), will be open to companies of all sizes active in Italy with the exception of credit and other financial institutions. Under the scheme, the projects will be selected through an open competitive bidding process.
The public support will take the form of direct grants covering investment costs, with a maximum amount of aid per project of €20 million.
The Commission concluded that the Italian scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of the REPower EU Plan and the Green Deal Industrial Plan, in line with Article 107(3)(c) TFEU and the conditions set out in the Temporary Crisis and Transition Framework.
- Aid to compensate for high energy prices. The aid, which can be granted in any form, will partially compensate companies, in particular intensive energy users, for additional costs due to exceptional gas and electricity price increases.
- Measures accelerating the rollout of renewable energy. Member States can set up schemes for investments in all renewable energy sources, including renewable hydrogen, biogas and biomethane, storage and renewable heat, including through heat pumps, with simplified tender procedures that can be quickly implemented, while including sufficient safeguards to protect the level playing field.
- Measures facilitating the decarbonization of industrial processes. To further accelerate the diversification of energy supplies, Member States can support investments to phase out from fossil fuels, in particular through electrification, energy efficiency and the switch to the use of renewable and electricity-based hydrogen which complies with certain conditions, with expanded possibilities to support the decarbonization of industrial processes switching to hydrogen-derived fuels.
- Measures aimed at supporting electricity demand reduction, in line with the Regulation on an emergency intervention to address high energy prices.
- Measures to further accelerate investments in key sectors for the transition towards a net-zero economy, enabling investment support for the manufacturing of strategic equipment, namely batteries, solar panels, wind turbines, heat-pumps, electrolysers and carbon capture usage and storage as well as for production of key components and for production and recycling of related critical raw materials.
Sanctioned Russian-controlled entities will be excluded from the scope of these measures.
Measures particularly important to accelerate the green transition and reduce fuel dependencies will be in place until 31 December 2025. This concerns in particular measures accelerating the rollout of renewable energy and energy storage, measures facilitating the decarbonization of industrial processes and measures to further accelerate investments in key sectors for the transition towards a net-zero economy.
This €450 million scheme will allow Italy to accelerate the deployment of renewable hydrogen capacities, in line with the EU Hydrogen Strategy. The measure will also help Italy reduce its dependence on imported fossil fuels, in line with the REPowerEU Plan
…said Margrethe Vestager, Executive Vice-President in charge of competition policy
