The European Commission (EC) has approved a German state aid scheme worth €200 million to support the production of renewable hydrogen and its derivatives in Canada for supply to Germany and the wider European Union. The scheme targets renewable fuels of non-biological origin (RFNBO) derived from renewable electricity and carbon. These fuels will be imported into Germany and sold across the European Union. The measure aligns with objectives under the Clean Industrial Deal, the EU Hydrogen Strategy, and the REPowerEU Plan to reduce reliance on Russian fossil fuels and accelerate the clean energy transition.
The scheme will enable the installation of up to 300 MW of electrolysis capacity. Aid will be allocated through a competitive bidding process scheduled to conclude in 2027. The mechanism is based on a double auction model linking Canadian RFNBO producers with EU RFNBO buyers. State support will bridge the gap between bid prices offered by sellers and buyers. Beneficiaries must demonstrate compliance with EU standards for RFNBO production as defined under relevant delegated acts.
Germany expects the scheme to help avoid up to 2.47 million tonnes of carbon equivalent emissions and support compliance with EU climate targets. The EC assessed the measure under Article 107(3)(c) of the Treaty on the Functioning of the European Union and the 2022 climate, environmental protection, and energy aid guidelines. It found the scheme necessary and proportionate, with safeguards to limit impacts on competition and trade. On this basis, the EC approved the scheme under EU State aid rules.
