IN LONDON: The European Commission has approved a €6 billion ($10.04 billion) Italian scheme to support the production of renewable hydrogen for the transport and industrial sectors.
Italy notified the commission of a scheme, running until the end of 2029, to support the production of 200,000 tonnes of renewable hydrogen annually. Both hydrogen produced via electrolysis powered by electricity from renewable energy sources and hydrogen produced from biogenic sources through biological, bio-thermochemical and thermochemical processes are eligible under the measure.
The scheme will contribute to the development of renewable hydrogen production capacity in line with the objectives of the EU Hydrogen Strategy and the Clean Industrial Deal.
The aid will take the form of two-way contracts for difference. Under these contracts, a strike price for hydrogen will be determined through a competitive bidding process.
If the price of an alternative fuel that would be used by the hydrogen consumers falls below that strike price, Italy will pay hydrogen producers the difference. If the price of the counterfactual fuel exceeds the strike price, the beneficiaries will pay the difference to the Italian state.
This news comes after the European Commission unveiled its 2025 Innovation Fund auctions for industrial heat decarbonisation and hydrogen production, as previously reported.
For hydrogen production, 58 bids were brought in from European hydrogen producers across 11 countries, seeking €8.4 billion in funding. The auction aims to provide fixed-premium payments to projects, helping bridge the gap between domestic production costs and the current market price.
The EU’s hydrogen production market is heavily transitioning toward green, renewable-based and low-carbon hydrogen – aiming for 10 million tonnes of domestic production by 2030.
According to the Green Hydrogen Organisation, Italy views green hydrogen as a cornerstone for transforming energy-intensive industries, such as steelmaking and chemicals, while supporting clean mobility and energy storage solutions.
The nation’s capacity targets for hydrogen production includes targeting 5 gigawatts of electrolyser capacity by 2030. Hydrogen is also expected to penetrate 2% of the final energy demand by 2030, with a potential for up to 20% by 2050.
Write to Aaliyah Rogan at Mining.com.au
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