Europe has cleared the way for one of its biggest hydrogen bets yet.

 

The European Commission has approved a massive €1.3 billion German state aid scheme aimed at turbocharging renewable hydrogen production and cutting the bloc’s dependence on Russian fossil fuels.

 

The approval, under EU State aid rules, will channel funding through the European Hydrogen Bank’s “Auctions-as-a-Service” mechanism tied to the 2026 auction round.

 

Berlin’s plan is ambitious: support the construction of up to 1,000 MW of electrolyser capacity and drive the production of as much as 10 million tonnes of renewable hydrogen — a move the Commission says could prevent up to 55 million tonnes of CO2 emissions.

 

The scheme forms part of Europe’s wider push under the Clean Industrial Deal, the REPowerEU Plan and the EU Hydrogen Strategy to accelerate industrial decarbonisation and strengthen energy independence.

 

Under the programme, companies building new electrolysers will receive direct grants based on every kilogram of renewable hydrogen produced over a maximum period of ten years. To qualify, projects must comply with strict EU rules governing renewable fuels of non-biological origin (RFNBOs).

 

The funding will specifically target projects feeding renewable hydrogen into the Danish Hydrogen Backbone 1 pipeline — a key Project of Common Interest — before supplying buyers connected to Germany’s Hydrogen Core Network. Brussels said the cross-border infrastructure is designed to connect North Sea renewable hydrogen sources with large industrial consumers across Europe.

 

The aid will be distributed through a competitive bidding process overseen by the European Climate, Infrastructure and Environment Executive Agency.

 

In its assessment, the Commission concluded the scheme was “necessary and appropriate” to scale renewable hydrogen production and found that projects would not proceed without public backing.

 

Brussels also said Germany had introduced “sufficient safeguards” to limit market distortion, noting that beneficiaries would be selected through competitive auctions and that support would be restricted to the minimum required.

 

The Commission further argued that limiting eligibility to projects connected to the Danish Hydrogen Backbone 1 pipeline and Germany’s Hydrogen Core Network would not unfairly distort competition because the infrastructure is expected to reduce renewable hydrogen costs over the long term.

 

With the approval now secured, Germany moves to the forefront of Europe’s hydrogen race as the EU intensifies efforts to reshape its industrial energy system around clean fuels.