en.Wedoany.com Reported - The European Commission has recently approved a €6 billion Italian state aid plan aimed at promoting the production of renewable hydrogen for use in the transport and industrial sectors. The plan explicitly includes biomass-based hydrogen production as one of the eligible production pathways. It will run until the end of 2029, with the goal of supporting an annual production of 200,000 tons of renewable hydrogen.

Eligible renewable hydrogen projects include hydrogen produced via electrolysis powered by renewable electricity, as well as hydrogen extracted from biomass sources through biological, biothermal chemical, and thermochemical processes, covering a variety of biomass conversion technologies.

Support will be provided through two-way Contracts for Difference (CfDs), with the strike price determined through competitive tendering. When the price of alternative fuels falls below the agreed strike price, Italy will pay the difference to producers; when the price exceeds the strike price, producers must return the difference to the Italian government.

The European Commission assessed that the aid is necessary and proportionate, noting that without public support, producers might not develop renewable hydrogen capacity. The environmental benefits of the plan, particularly for hard-to-abate sectors, are expected to outweigh any potential distortive effects on competition.

Executive Vice-President for the European Green Deal, Maroš Šefčovič, stated: "This plan will direct support to areas where hydrogen can contribute most to emission reductions."

This approval is based on the European Commission's 2022 Guidelines on State aid for climate, environmental protection and energy, which provide a framework for Member States to support the goals of the Green Deal in a cost-effective manner. This initiative aims to advance Italy's renewable hydrogen industry and contribute to achieving carbon neutrality targets.

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