Shell 'received €150m of subsidies for green hydrogen project that was ineligible for support': report
Oil giant had apparently threatened to pull the plug on Holland Hydrogen 1 unless it received IPCEI status from EU, which required intervention from Dutch government
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The oil giant, which reported a record annual profit of $40bn in 2022, then tried to attract government funding for the project, but under EU state-aid rules that would require the European Commission to grant it the status of an Important Project of Common European Interest (IPCEI).
The problem for Shell was that in order to be eligible for IPCEI status, projects had to show that they would not be financially viable without subsidies — and the company had demonstrated the opposite by announcing a final investment decision despite a lack of state support.
Ministry officials raised concerns in advance that Shell’s investment announcement would jeopardise the company’s funding request.
According to Follow the Money, Shell argued that its July announcement — which said it had “taken the final investment decision to build Holland Hydrogen 1” — did not count as taking an FID.
Shell further told the ministry that all orders placed were conditional and could be cancelled if Holland Hydrogen 1 did not get state aid.
Nevertheless, the ministry also agreed that awarding IPCEI status to such projects was against the spirit, if not the letter of the rules.
Follow the Money also questioned whether the plant should have been eligible for Dutch subsidies in the first place, given that the planned offtake within the oil major’s own refinery would go against the grant’s requirement that benefits are not limited solely to the subsidy recipient.
Shell may have got around this issue as it announced in July that some of the supply might also be used to power hydrogen trucks.
Holland Hydrogen 1 is due to use a 200MW alkaline electrolyser supplied by Thyssenkrupp Nucera and be powered by the yet-to-be-built 759MW Hollandse Kust Noord offshore wind farm in the Dutch North Sea.