EU backs 1.3bn hydrogen push in Germany

The European Commission has approved a €1.3 billion German State aid scheme aimed at accelerating renewable hydrogen production through the European Hydrogen Bank’s “Auctions-as-a-Service” mechanism. The funding supports projects linked to the auction round that closed in 2026 and is expected to help expand Europe’s hydrogen infrastructure while cutting industrial carbon emissions.

The move forms part of wider EU efforts under the REPowerEU Plan, the Clean Industrial Deal and the EU Hydrogen Strategy to reduce dependence on fossil fuels and speed up industrial decarbonisation.

For eeNews Europe readers, the announcement highlights how public funding and cross-border infrastructure are becoming tightly linked in Europe’s hydrogen economy. It also signals growing opportunities for electrolyser developers, infrastructure suppliers and industrial off-takers involved in large-scale clean hydrogen projects.

Hydrogen infrastructure focus

Under the scheme, Germany will support the construction of up to 1,000MW of electrolyser capacity and the production of as much as 10 million tonnes of renewable hydrogen. The European Commission estimates the projects could avoid up to 55 million tonnes of CO2 emissions.

A key aspect of the programme is its connection to cross-border hydrogen transport infrastructure. Supported projects must feed renewable hydrogen into the Danish Hydrogen Backbone 1 pipeline, a designated Project of Common Interest, before delivering it to buyers connected to Germany’s Hydrogen Core Network.

The funding will be distributed through a competitive bidding process overseen by the European Climate, Infrastructure and Environment Executive Agency (CINEA). Aid will be awarded as direct grants per kilogram of renewable hydrogen produced over a period of up to ten years.

To qualify, projects must comply with EU rules covering renewable fuels of non-biological origin (RFNBOs), including strict lifecycle emissions requirements.

Commission sees limited market distortion

The Commission assessed the programme under EU State aid rules and concluded that the measure is necessary to support renewable hydrogen investments that would otherwise not proceed without public funding.

Brussels also argued that restricting eligibility to projects connected to the Danish-German hydrogen infrastructure would not create undue market distortion because the pipeline network is expected to reduce renewable hydrogen costs over time.

“This investment in renewable hydrogen production is a step towards Europe’s decarbonisation goals,” said Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition. “The scheme will increase the supply of clean hydrogen and also support the building of cross-border infrastructure to connect production in the North Sea with industrial users elsewhere.”

The scheme follows earlier hydrogen support programmes approved for Germany in 2024 as well as similar initiatives in Austria, Lithuania and Spain.

The European Hydrogen Bank aims to help the EU reach its target of producing and importing 20 million tonnes of renewable hydrogen annually by 2030, funded partly through revenues from the EU Emissions Trading System.