On July 15, 2022 the EU Commission approved  a total of 5.4 bln of State Aid  funding to 41  hydrogen tech projects, in the first ever Important Project of Common European Interest in the hydrogen sector, the so called  IPCEI Hy2Tech”, The project aims at developing innovative technologies for the hydrogen value chain to decarbonise industrial processes and mobility. It involves 35 companies and 41 projects from 15 Member States: Austria, Belgium, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Italy, the Netherlands, Poland, Portugal, Slovakia and Spain.

Currently, there is no established hydrogen market in Europe. This makes it risky for companies or even Member States to invest alone in such innovative technologies. That is where State aid has a role to play to unlock, crowd-in and leverage substantial private investments that would otherwise not materialise.  According to the EU Commission the IPCEI Hy2Tech contributes to the EU’s decarbonisation targets, as laid down in the EU Climate Law and REPowerEU Plan, to diversify energy supplies and moving away from Russian fossil fuels. In addition  IPCEI Hy2Tech has the potential to generate positive spill-over effects across the EU. Results of the research and development, which are not protected by intellectual property rights, will be widely disseminated.  Last but not least the EU Commission  conducted a technical assessment for all 41 projects to determine whether each project complies with the innovativeness requirements going beyond the global state-of-the-art and that the approved State aid per beneficiary is not higher than the eligible costs and the so-called funding gap. This is the difference between the positive and negative cash flows over the lifetime of the investement.

As a safeguard to public funds, Member States have also agreed to put in place a claw-back mechanism for those projects receiving large amounts of aid. The claw-back would kick-in if the project generates extra net revenues beyond projections. In such case the companies will return to the respective Member States part of the money received. In this case, the Commission has authorised under the State aid rules up to 5.4 billion euros of aid.  And this public support will crowd in another 8.8 billion euros of private investments. The total investments under the IPCEI Hy2Tech are expected to be almost 14.2 billion euros.

The Commission’s scrutiny has halved the potential aid that could be granted under this IPCEI. A total of 35 companies from 15 Member States will participate in 41 projects. These are both well-known large industrial players, such as Symbio, Arkema, Daimler Truck and Ansaldo, but also small and medium enterprises and start-ups, such as Advent, H2B2 and McPhy. They will engage in additional collaborations with over 300 indirect partners all over Europe, including universities and research organisations.

The project is structured in four technology fields, concerning generation of hydrogen, fuel cells, storage, transportation and distribution of hydrogen, and end-users applications:

1. Hydrogen generation technologies, like Elcogen, an Estonian SME, will develop an electrolyser with a reduced amount of critical raw materials and an optimised manufacturing process.
2. Fuel cell technologies, like Nedstack, a Dutch SME, will develop fuel cells for fixed and maritime use.  This will increase fuel cells’ efficiency and applicability.
3. Technologies for hydrogen storage, transportation and distribution. As an example, the French company Arkema will develop and produce materials for hydrogen tanks with bio-based inputs. This can drastically reduce the manufacturing time and cost, while being fully recyclable and increasing safety.
4. Technologies for end-users across a number of applications, in particular in the mobility sector, such as heavy-duty trucks, trains and ships. But also in energy systems, in which hydrogen can serve as a stabilising reserve. To give an example, Daimler Truck aims at creating trucks powered by liquid hydrogen.

The total investments under the IPCEI Hy2Tech are expected to be almost 14.2 billion euros.