Commission approves €550 million Italian State aid scheme to support investments for the use of hydrogen in industrial processes to foster the transition to a net-zero economy

The European Commission has approved a €550 million Italian scheme to support investments for the use of hydrogen in industrial processes to foster the transition towards a net-zero economy, in line with the Green Deal Industrial Plan. The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on 9 March 2023 and amended on 20 November 2023, to support measures in sectors which are key to accelerating the green transition and reducing fuel dependencies.

Italy notified to the Commission, under the Temporary Crisis and Transition Framework, a €550 million scheme to support investments enabling the substitution of methane and other fossil fuels with renewable hydrogen, which can be combined with electrification or significant energy efficiency improvements in industrial processes, to foster the transition to a net-zero economy.

Under this measure, which will be funded through resources allocated to the Italian National Recovery and Resilience Plan (PNRR), the aid will take the form of direct grants.

The measure will be open to companies relying on the use of fossil fuels as energy source or feedstock for their production processes in industrial sectors in Italy. Eligible projects must lead to reduce greenhouse gas emissions from production processes by at least 40% or to reduce energy consumption by at least 20%, compared to today. In order to be eligible, companies need to switch from the use of fossil fuels to renewable hydrogen, and can combine this investment with investing in the electrification of their production processes or in significantly improving their energy efficiency.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This €550 million Italian scheme will help industries to significantly decarbonise industrial processes that depend on a switch to hydrogen for their green transition. The measure will also help Italy to reduce its dependence on imported fossil fuels, in line with the REPowerEU Plan, and ensure a full switch to hydrogen by 2036 in all supported investments.”