The European Commission (EC) announced yesterday (Thursday) it would award a combined €3.6bn ($4bn) to 41 low-carbon technology projects — more than half of which are dedicated to green hydrogen production, its derivatives such as methanol and ammonia, or scaling up electrolyser and fuel-cell manufacturing.
The grants from the Innovation Fund, which is backed by revenues from the EU’s Emissions Trading System, are phased over a project’s lifetime, with only 40% of the cash available upfront before the facility is operational and the rest unlocked over time as it demonstrates reduction in CO2 emissions.
The projects are also expected to come on line by 2030.
This third call for Innovation Fund grants included four categories: general decarbonisation, innovative electrification or hydrogen in industry, clean tech manufacturing, and mid-size pilots for technologies not yet ready for commercialization.
However, H2-based projects made up all 13 of those chosen for the “electrification or hydrogen in industry” category, worth nearly €1.2bn in total, and made in-roads into all other categories.
The 13 industrial hydrogen projects selected are:
- H2 Green Steel: A hydrogen-based green steel project in northern Sweden, which will include 700MW of electrolyser capacity (the largest in Europe).
- Green H2 Atlantic: A 96MW pressurised alkaline electrolysis system at a decommissioned coal power plant in Portugal, developed by a consortium led by EDP. The project has also received Horizon Europe funding worth €30m and is expected to cost more than €76m in total.
- H2 Maasvlakte: An electrolyser project developed by Uniper in the Port of Rotterdam on the site of an existing coal power plant in order to repurpose infrastructure such as grid connections and water supply. Offtake is intended to come from nearby refineries, particularly for production of synthetic fuels. Uniper has already tapped Plug Power to provide the 100MW PEM electrolyser for the project.
- electroMethanol-Rhône: A project developed in France by Elyse Energy, which plans to produce renewable hydrogen from an electrolyser as a feedstock for synthetic methanol, with the carbon captured from a nearby cement plant.
- FFI Holmaneset Green Ammonia Production (GAP): A facility in Norway that will use a 300MW electrolyser powered by surplus renewable energy from the grid. Australia’s Fortescue Future Industries (FFI) has already signed a conditional power-purchase agreement (PPA) with Statkraft to supply the project with excess renewable energy from the grid if the facility reaches FID. The renewable ammonia will be supplied by ship to domestic and European markets. While Norway is not a member of the EU, it is eligible for Innovation Fund grants due to participation in the ETS and other climate activities.
- Tarragona Network Hydrogen: A pressurised alkaline electrolyser project developed by Repsol in Spain, which will sell both renewable hydrogen and by-product oxygen to offtakers.
- Columbus: A project by Engie subsidiary Electrabel to capture CO2 from lime production in Belgium and combining it with green H2 to produce e-methane, which will then be either blended into the gas grid or sold to industrial users or the transport sectors.
- Green Methanol in Galicia: An e-methanol plant in Spain developed by Iberdrola that will use a combination of PEM, solid oxide and alkaline electrolysers, as well as both enzyme-based and direct air carbon-capture technologies.
- Asturias H2 Valley: Developed by EDP subsidiary H2 Aboño, this renewable hydrogen facility will be located inside an existing coal power plant in Spain.
- EnergyHys: A project in the Netherlands developed by TotalEnergies, which aims to use the green H2 produced to decarbonize hard-to-abate industries and also supply mobility.
- Triskelion: A green methanol facility in Spain developed by chemicals and power producer Forestal del Atlántico, based on green hydrogen and captured carbon from an existing combined heat and power plant. Triskelion will also liquefy and store oxygen produced during electrolysis.
- HydrOxy Hub Walsum: A PEM electrolyser project based in the German city of Duisburg, powered by existing renewables assets and a battery. Offtake of the green H2 will mainly come from a local steelmaker, with some supply to transport and other industries. The project will also supply waste heat to the local district heating system.
- Green Ammonia Linz (GRAMLI): A PEM electrolyser-based plant in Austria, which will follow the electricity grid’s emissions intensity to flexibly use more power when the share of renewables on the grid is high.
The EC confirms that projects entered into this category that met minimum requirements but were not awarded funding will be eligible to participate in the upcoming pilot auction for a fixed subsidy of up to €4/kg, “provided they were about hydrogen production and they are ready for grant disbursement schedule that starts only after entry into operation”.
However, it is unclear whether projects in this list will also be able to enter the auction, since the draft terms and conditions since the draft terms and conditions prohibit developers from stacking subsidies.
Additionally, four electrolyser or fuel cell projects were chosen for the clean tech manufacturing category, which selected 11 projects for grants worth a combined nearly €800m. These are:
- HyNCREASE: A project run by De Nora in Germany to design, construct and validate more efficient and automated manufacturing lines for electrolysers and fuel cells.
- Topsoe SOEC Stack Module Factory: A factory being built by Topsoe in Denmark to produce its solid oxide electrolysers. The company has already taken FID on a 500MW factory in the country, but has not yet made a decision on scaling up to 5GW of capacity.
- ELYAS: A project by Bosch in Germany to industrialise a “smart electrolysis module”, combining its electrolysis stack with automotive-based power electronics, control units and sensors.
- GIGA-SCALES: A project in Belgium by Agfa to scale up and automate the production line of its Zirfon membrane for alkaline electrolysers.
In combination with previous electrolyser projects that received grants via the Innovation Fund, this covers 11% of the 100GW electrolyser production capacity targeted for 2030 in the proposed Net Zero Industry Act, according to the EC.
Three hydrogen-based projects were also included in the general decarbonisation category, which selected eight projects for grants worth €1.4bn. These include the use of H2 to boost production at a biorefinery in Sweden and an e-methanol project in Greece.
This category also selected the H2Sines.Rdam project, developed by a consortium of Shell, Engie, Vopak and Anthony Veder, which will build a 400MW electrolyser in Portugal and transport liquefied hydrogen via fuel-cell ship to Rotterdam, which will use H2 boil-off during the journey.
Two hydrogen projects were included in the mid-size pilots category, which selected nine projects for a combined €250m: a Norwegian e-fuel facility capturing CO2 from a ferro/silicon-manganese plant and combining it with hydrogen from an alkaline electrolyser, and the SEAWORTHY prototype combining wave energy, wind turbines and hydrogen production, storage and fuel cell technology into a single submersible platform.
The EU will open a call worth €4bn for large, medium, and small projects to access Innovation Fund grants at the end of this year, although it also plans to eventually move away from a call-for-proposals system to an auction model.
