EU approves French 1GW hydrogen electrolysis scheme

The European Commission has approved a major French State aid scheme designed to accelerate the production of renewable and low-carbon hydrogen. The initiative aims to support new electrolysers while helping industry reduce greenhouse-gas emissions and move away from fossil-based hydrogen.

For engineers, developers and industrial players across Europe, the decision signals continued policy momentum behind hydrogen infrastructure and electrolyser deployment. It also highlights growing opportunities in large-scale hydrogen projects linked to decarbonising heavy industry.

Under the approved scheme, France will fund new electrolyser installations to produce renewable and low-carbon hydrogen for industrial use. The programme targets the deployment of 1 GW of hydrogen electrolysis capacity, delivered through three competitive tender rounds.

The first tender will cover 200 MW of electrolysis capacity and carries an estimated budget of €797 million. The hydrogen generated through the programme must be sold exclusively for direct industrial applications. The goal is to ensure hydrogen is used primarily in sectors where electrification is not yet economically viable.

Financial support will take the form of a fixed premium, with contracts awarded for a 15-year period. Developers receiving support must demonstrate compliance with EU rules covering renewable fuels of non-biological origin (RFNBO) and recently defined criteria for low-carbon hydrogen.

France launches large-scale hydrogen support

The subsidies offset the higher production costs of renewable hydrogen, particularly electricity costs, compared with conventional fossil-derived hydrogen.

The scheme is part of France’s broader hydrogen strategy, which targets 4.5 GW of electrolyser capacity by 2030 and 8 GW by 2035. According to French estimates, the programme could help avoid up to 1,100 kilotons of CO₂ emissions annually.

The European Commission assessed the scheme under EU State aid rules and the 2022 guidelines for climate, environmental protection and energy support (CEEAG). It concluded the programme meets the requirements to support new economic activity while limiting distortions to competition.

In particular, the Commission determined that renewable hydrogen production remains significantly more expensive than fossil hydrogen, meaning public support is necessary to stimulate investment.

Officials also highlighted safeguards built into the scheme, including an open and transparent bidding process and strict limits to ensure subsidies remain proportionate.

EU sees hydrogen as key industrial decarbonisation tool

“This French scheme to support renewable and low-carbon hydrogen marks an important step in strengthening Europe’s clean industrial future. Hydrogen will play a strategic role in decarbonising sectors where electrification alone is not sufficient. At the same time, it helps to reduce our dependence on imported fossil fuels. The aid will support the most cost-effective projects, while minimising distortions of competition and trade in the internal market.” said Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition.

The approval aligns with several major EU policy initiatives, including the EU Hydrogen Strategy, the Clean Industrial Deal, and the REPowerEU Plan, which aims to rapidly reduce Europe’s reliance on Russian fossil fuels while accelerating the energy transition.

Together, these programmes reinforce hydrogen’s role as a strategic technology for Europe’s future industrial energy system.