EU Commission approves €450 million Italian scheme to support the production of renewable hydrogen
The European Commission has approved a €450 million Italian scheme to support the production of renewable hydrogen with the aim to foster the transition to a net-zero economy, in line with the Green Deal Industrial Plan, according to Commission's release.
The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on 9 March 2023 to support measures in sectors which are key to accelerate the green transition and reduce fuel dependencies.
The new Framework amends and prolongs in part the Temporary Crisis Framework, adopted on 23 March 2022 to enable Member States to support the economy in the context of the current geopolitical crisis, already amended on 20 July 2022 and on 28 October 2022.
The measure, financed under the Recovery and Resilience Facility ('RRF'), will be open to companies of all sizes active in Italy with the exception of credit and other financial institutions. Under the scheme, the projects will be selected through an open competitive bidding process. The public support will take the form of direct grants covering investment costs, with a maximum amount of aid per project of €20 million.
The Commission found that the Italian scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework. In particular, the aid will be granted on the basis of a scheme with an estimated volume and budget; the aid amount will be determined through an open, clear, transparent and non-discriminatory competitive bidding process; and the aid will be granted before 31 December 2025.
On 9 March 2023, the Commission adopted a new Temporary Crisis and Transition Framework to foster support measures in sectors which are key for the transition to a net-zero economy, in line with the Green Deal Industrial Plan. Together with the amendment to the General Block Exemption Regulation (‘GBER') that the Commission endorsed on the same day, the Temporary Crisis and Transition Framework will help speeding up investment and financing for clean tech production in Europe. It will also assist Member States in delivering on specific projects under National Recovery and Resilience Plans which fall within their scope.
The new Framework amends and prolongs in part the Temporary Crisis Framework, adopted on 23 March 2022, to enable Member States to use the flexibility foreseen under State aid rules to support the economy. The Temporary Crisis Framework has been amended on 20 July 2022, to complement the Safe gas for a Safe Winter Package and in line with the REPowerEU Plan objectives.
The Temporary Crisis Framework has been further amended on 28 October 2022 in line with the Regulation on an emergency intervention to address high energy prices and the Regulation enhancing solidarity through better coordination of gas purchases, reliable price benchmarks and exchanges of gas across borders. The Temporary Crisis and Transition Framework provides for the following types of aid, which can be granted by Member States: Limited amounts of aid, in any form, for companies affected by the current crisis or by the subsequent sanctions and countersanctions up to the increased amount of €250,000 and €300,000 in the agriculture, and fisheries and aquaculture sectors respectively, and up to €2 million in all other sectors; Liquidity support in form of State guarantees and subsidised loans.
In exceptional cases and subject to strict safeguards, Member States may provide to energy utilities for their trading activities public guarantees exceeding 90% coverage, where they are provided as unfunded financial collateral to central counterparties or clearing members.
The aid, which can be granted in any form, will partially compensate companies, in particular intensive energy users, for additional costs due to exceptional gas and electricity price increases. The individual aid amount may be calculated based on either past or present consumption, taking into account the need to keep market incentives to reduce energy consumption and to ensure the continuity of economic activities. In addition, Member States may provide support flexibly, including to particularly affected energy-intensive sectors, subject to safeguards to avoid overcompensation and to incentivise the reduction of the carbon footprint in case of aid amounts above €50 million.
