Commission approves €3 billion German State aid scheme to support the development of Hydrogen Core Network
The European Commission has approved, under EU State aid rules, an estimated €3 billion German scheme to support the construction of the Hydrogen Core Network (‘HCN’). The measure will contribute to the achievement of the objectives of the EU Hydrogen Strategy and ‘Fit for 55’ package, by enabling the creation of hydrogen transmission infrastructure that is needed to foster the use of renewable hydrogen in industry and transport by 2030.
Germany notified the Commission of its intention to introduce a €3 billion scheme to support the construction of the domestic HCN. The HCN will be the backbone of long-distance transport pipelines for hydrogen in Germany and part of the European hydrogen backbone connecting several Member States.
The measure aims to facilitate investments in the construction of the HCN. Necessary investments include (i) repurposing of existing gas pipelines to transport hydrogen, and (ii) building new hydrogen pipelines and compressor stations.
The construction and operation of the HCN will be financed by hydrogen transmission system operators (TSOs), who will be selected by the German federal network agency, Bundesnetzagentur. The aid will take the form of a State guarantee which will allow the TSOs to obtain more favourable loans to cover initial losses in the ramp-up phase of the HCN. At first, Germany expects only a small number of consumers to be using the network, and the tariffs will be lower than otherwise needed to cover relevant costs, to encourage this use and facilitate the uptake of hydrogen.
Executive Vice President Margrethe Vestager, in charge of competition policy, said: “A core network of pipelines to transport hydrogen is crucial to trigger investments in hydrogen production and consumption, and can help accelerate the green transition. The German scheme approved today will significantly contribute to the development of a European hydrogen market while minimising any potential distortions to competition.”
