EU Commission Approves €6 Billion Italian State Aid Scheme for Renewable Hydrogen
Brussels has approved a €6 billion Italian scheme targeting 200,000 tonnes of renewable hydrogen per year for the industrial and transport sectors.
| Sectors | Hydrogen Energy, Green Hydrogen |
|---|---|
| Themes | Investments & Transactions, Grants & Subsidies |
| Countries | Italy |
The European Commission has approved a €6 billion state aid scheme put in place by Italy to support the production of renewable hydrogen. The programme targets the transport and industrial sectors, aiming for an annual production capacity of 200,000 tonnes. As natural hydrogen discoveries multiply across the continent — illustrated by drilling at 3,655 metres confirming significant natural hydrogen reserves in Moselle — Italy is betting on industrially produced renewable hydrogen. The decision falls within the framework of the EU Hydrogen Strategy and the Clean Industrial Deal.
A Two-Way Contract for Difference Mechanism
The scheme takes the form of two-way contracts for difference (CfD). A strike price will be determined through a competitive bidding process. If the price of an alternative fuel used by hydrogen consumers falls below that strike price, the Italian state will pay producers the difference. Conversely, if the counterfactual fuel price exceeds the strike price, beneficiaries will pay the difference back to the state.
Two categories of production are eligible: hydrogen produced via electrolysis powered by renewable energy sources, and hydrogen from biogenic sources through biological, bio-thermochemical and thermochemical processes. The scheme runs until 31 December 2029.
Compliance with EU State Aid Rules
The Commission assessed the scheme under Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU), which allows member states to support the development of certain economic activities under specific conditions. It also applied the 2022 Guidelines on State aid for climate, environmental protection and energy (CEEAG), designed to help member states meet Green Deal objectives.
According to the Commission, beneficiaries would not produce renewable hydrogen without public support. It concludes the aid is proportionate, with the competitive bidding mechanism ensuring support is limited to the minimum price accepted by bidders. The institution finds that the positive environmental effects — particularly the decarbonisation of high-emission sectors — outweigh potential distortions of competition.
Positioning Within the EU Hydrogen Strategy
The approval fits into a broader strategic framework. In July 2020, the Commission published its EU Hydrogen Strategy, setting ambitious goals for clean hydrogen production and use across the Union. That same year, it launched the European Clean Hydrogen Alliance, a platform bringing together industry, civil society and public authorities. Italy thus ranks among the first member states to commit public resources of this scale to the renewable hydrogen sector.
The decision, registered under reference SA.118992, will be made public in the Commission's state aid register once any confidentiality issues are resolved. New decisions are also published in the Official Journal of the European Union and listed in the Competition Weekly newsletter.
