Europe’s billion-dollar race in quest of different vitality sources
- September 23, 2022
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The European Commission announced on Wednesday the approval of a fund of up to €5.2 billion to support and finance the development and implementation of hydrogen-linked projects.
On the same day that Vladimir Putin raised his tone regarding possible developments in the Ukrainian War, Europe gave yet another signal that it is accelerating the race to find alternative sources of energy and reduce dependence on Russian gas.
This Wednesday, September 21, the European Commission announced the approval of a fund of up to €5.2 billion to support and finance the development and implementation of projects in the area linked to hydrogen.
“Hydrogen could be a game-changer for Europe,” Ursula von der Leyen, president of the European Commission, said in a statement. “It is critical to diversifying our energy sources and helping us to reduce our dependence on Russian gas. We need to bring scale to this niche market.”
Named IPCEI Hy2Use, the initiative was jointly developed by thirteen Member States of the European Union. The group includes Austria, Belgium, Denmark, Finland, France, Greece, Italy, Netherlands, Poland, Portugal, Slovakia, Spain and Sweden.
These countries will be responsible for the announced resources and the expectation is that this incentive will unlock an additional €7 billion in private investment. The fund will cover 35 projects, from 29 companies operating in one or more markets in this relationship, between startups and small and medium-sized companies. In addition to 160 external partners, such as universities and research centers.
“The hydrogen value chain is taking its first steps in Europe and this poses risks for companies and Member States to invest alone in this innovative market. This is where state aid has a role to play in leveraging substantial private investment that would otherwise not materialise,” said Margrethe Vestager, Executive Vice President of the European Commission.
In a note, the European Commission highlighted that the IPCEI Hy2Use will cover a large part of the hydrogen value chain, which will include fronts such as the construction of an infrastructure composed mainly of electrolyzers – devices that allow the production of hydrogen – on a large scale.
Renewable, low-carbon hydrogen transport and storage facilities are also planned; and the development of technologies for the integration of gas into industrial processes in various sectors, especially those with the most decarbonization challenges, such as steel, cement and glass.
The initiative also includes two individual projects under the responsibility of Norway. With a series of steps planned to come into operation in the periods from 2024 to 2026 and from 2026 to 2027, the expectation is that the general conclusion of the plan will take place in 2036.