EU gives go-ahead to funding for Spain’s green hydrogen industry

Spain is seeking to become a top renewable H2 producer in the EU’s decarbonization strategy

Spain hasn’t made any attempt to hide its ambition to become a top green hydrogen producer within the European Union’s overall strategy to decarbonize and reduce – eventually eliminating – its dependence on fossil fuel imports.

A recent funding approval has brought the country closer to its goals

The European Commission has given the approval for Spain to receive considerable aid to fund its green hydrogen growth.  The European Commission’s competition officials have now officially approved €1.2 billion in support for Spain’s young H2 industry. The funds are intended for use in supporting Spain’s goals to become a major renewable H2 producer.

Spain’s strategy for renewable H2 is a part of a program that will receive its full funding from the country’s portion of the EU recovery fund, which was established on the heels of the COVID pandemic.  The money will pay for the construction of production plants with a capacity of at least 100 megawatts, which can apply for the support as the country develops its “hydrogen valleys.”

Producing green hydrogen all over Spain

Green hydrogen is the result of producing H2 using processes powered by renewable energy.  Spain has considerable potential to build new solar and wind farms which can be used for powering electrolyzers.  Those will split water molecules into oxygen and hydrogen with next to no carbon footprint at all.

The applications for support by production projects in the country are already underway within a competitive bidding system, and the aid will be disbursed by the close of 2025.  The European Union has permitted the country to step away from their otherwise highly strict ban on national support for domestic industry, when it comes to specific areas for meeting key EU policy goals. In this case, it means supporting the decarbonization of the EU.

Funding an acceleration of growth

Margrethe Vestager, the Commission vice president in charge of competition policy has underscored that Spain’s strategy will help to speed up the construction of green hydrogen production facilities in the EU, which align with the bloc’s overall strategic goals as well.

“The scheme will also help Spain reduce its dependence on imported fossil fuels, while minimising any potential distortions to competition,” said Vestager.