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€900m French package to support renewable hydrogen in industry and transport

Renewable hydrogen for use in industry and transport is set to receive support from a €900m ($971m) French support scheme.

Approved by the European Commission on Wednesday (March 27), the package will provide support for the production of heat and fuels from biomass for industry, and liquid fuels from biomass and renewable hydrogen for industry and transport.

Set to be awarded as direct grants, the aid will be open to new installations and projects that are “significantly accelerated or scale up.” Projects will have to be completed and put into operation within 36 months from receiving the grant.

Margthe Vestager, Commission Executive Vice-President, said the €900m package will help companies to increase the use of energy and fuels produced from biomass and renewable hydrogen.

“This measure is an important step in the transition to a Net Zero economy, while protecting the level playing field in the Single Market,” she added.

The measure will cover part of eligible project investment costs, with support grants set to close on December 31, 2025.

Approved under the EU’s Temporary Crisis and Transition Framework, the package is hoped to support Europe’s green transition and reducing its fossil fuel dependency.

Last year (2023), France was due to unveil a €4bn ($4.3bn) subsidy package to support low-carbon hydrogen projects through Contracts for Difference (CfDs). By 2030, the nation plans to install 6.5GW of low-carbon electrolytic hydrogen production capacity, ahead of reaching 10GW in 2035.

Wider EU rules have been put in place to mandate hydrogen’s use in transport and industry.

In October 2023, the European Council adopted the Renewable Energy Directive (RED), setting mandatory targets for renewable energy use, to see clean energy make up 42.5% of the EU’s final energy consumption by 2030.

Member states agreed that 42% of hydrogen used in industrial processes should come from renewable fuels of non-biological origin (RFNBOs) by 2030, increasing to 60% by 2035.

With approximately 9.7 million tonnes of grey hydrogen used in the EU per year, the new agreement is estimated to create an initial demand for over four million tonnes of renewable hydrogen by the end of the decade, and almost six million tonnes by 2035.

In transport, states agreed to a binding target to reduce 14.5% of the greenhouse gas (GHG) intensity from the use of renewables by 2030. The new rule set a sub-target for a 5.5% share of transport fuels to be advanced biofuels and RFNBOs (renewable hydrogen and hydrogen-based fuels).

Within the transport target, there is a minimum requirement for 1% of RFNBOs in the share of renewable energies supplied to the sector by 2030

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