To help the EU decarbonize its industry, the European Commission is allocating more than €250 million from the Connecting Europe Facility (CEF) for 21 studies on hydrogen infrastructure development.
It was revealed that the funds will help mitigate the investment risks associated with this emerging market and complement the hydrogen policy framework introduced in the Gas and Hydrogen Package.
The grants will be used for projects in Austria, Belgium, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Italy, Lithuania, Latvia, Poland, Portugal, Spain and Sweden: notably the BarMar-H2med project between Spain and France, backbone projects in Italy, Portugal and Spain, and hydrogen corridors and routes in the Baltic Sea region.
Notably, the Gas Transmission System Operators (TSOs) of Finland, Estonia, Latvia, Lithuania, Poland and Germany have announced the launch of a feasibility study in December 2024 for the Nordic-Baltic Hydrogen Corridor (NBHC).
Prior to the start of the feasibility study, the Transmission System Operators (TSOs) will carry out a joint commercial principle study to examine preliminary principles for cross-border cost allocation. The objective is also reportedly to develop a mutually applicable commercial and revenue model (tariff model) to ensure the financial viability of all participating transmission system operators.
Commenting on the EU funding, Sara Kärki, Senior Vice President, Hydrogen Development, TSO Gasgrid, Finland, said: “The decision demonstrates that Finland and the Baltic region are strategically important and highly competitive for the development of the hydrogen economy and support of the EU’s climate goals.”
It is worth noting that in December last year, companies from France, Germany, Portugal and Spain formed the H2Med Southwest Hydrogen Corridor Alliance to promote the development of a single European market for hydrogen energy by connecting hydrogen production, storage and consumption projects. It is understood that the alliance aims to accelerate the implementation of the H2Med corridor by the early 2030s.
The EU’s support for research into the development of hydrogen energy is part of a €1.2 billion program to promote 41 cross-border energy infrastructure projects that have been granted Projects of Common Interest (PCI) and Projects of Mutual Interest (PMI) status in 2024 under the framework of the Trans-European Energy Network (TEN-E) policy.
According to the Commission, this is the largest call for tenders under the current CEF Energy Program, exceeding the initial budget of €850 million for the call, both in terms of the number of applications received and the funds awarded. It is also said to be the first tender event under the revised TEN-E regulation, which includes hydrogen and offshore grid projects.
As the Draghi report emphasizes, such cross-border energy infrastructure investments are key to ensuring Europe’s competitiveness. They are expected to contribute to the EU’s goal of integrating energy markets and decarbonizing the energy system.
In addition to hydrogen development research, the program will also benefit eight grid projects, including offshore grids and smart grids. Nearly €750 million of these funds are earmarked for these projects. In addition, €250 million will be used to support the construction of three projects and the financing of nine pre-CO2 infrastructure studies.
Dan Jørgensen, Commissioner for Energy and Housing, commented: “The Commission’s proposed allocation of €1.25 billion is the highest amount ever allocated by the Connecting Europe Facility for energy infrastructure projects, which make an important contribution to building our Energy Union. This is also the first time that hydrogen energy and offshore grid projects have been selected. Once completed, these successful projects will advance our efforts to decarbonize our economy and society, integrate our energy markets, and preserve the competitiveness of our industry.”
Notably, the official adoption of the award will reportedly take place in the coming weeks. The European Climate, Infrastructure and Environment Executive Agency (CINEA) will then develop grant agreements with the beneficiaries.
The next CEF Energy call for energy infrastructure proposals is scheduled for 2025.