Germany Scraps €350 Million in Subsidies for Hydrogen Projects
(Bloomberg) — Germany abandoned plans to funnel €350 million ($368 million) into hydrogen projects, putting clean-fuel goals even further from reach.
The funding had been available through a European Hydrogen Bank program allowing the use of national subsidies to get the industry off the ground. But the European Commission and Germany failed to agree on terms, meaning the money will now go to other green projects or flow back into the federal budget.
There were “very tight specifications,” the country’s Economy Ministry said in an email explaining the decision.
The European Union has put green hydrogen — made using renewable electricity — at the heart of its drive to decarbonize key sectors such as heavy industry. Yet the hydrogen bank’s first bidding process in April, in which companies competed for a fixed premium for each kilogram of hydrogen produced, favored countries with abundant renewables such as Finland and Spain.
Berlin got permission to distribute its own subsidies to bidders that lost out, with the EU insisting on a price ceiling of €1.44 per kilogram. Many companies deemed that too low, given that Germany’s high power prices make output costly.
Kerstin Andreae, chair of the country’s BDEW energy association, said :
While we understand that the cap has been introduced to avoid over-funding projects and distorting the market, it has clearly not been helpful for German companies,
Europe’s biggest economy aims to produce 10 gigawatts of hydrogen by the end of the decade, but a number of studies have shown that to be optimistic. The Economy Ministry itself recently conceded that “market developments indicate that part of this capacity could only be commissioned in subsequent years.”
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Germany Scraps €350 Million in Subsidies for Hydrogen Projects, source
