The European Commission has greenlit Germany's planned €3 billion ($3.2 billion) state aid package aimed at developing a Hydrogen Core Network (HCN) of pipelines. This initiative is part of Berlin's strategy to advance hydrogen infrastructure, crucial for achieving net-zero greenhouse gas emissions.
Under the approved plan, Germany will provide financial guarantees to support companies building and operating the €20 billion network. These guarantees will enable the network operators to secure more favorable loans, particularly during the initial phase from 2025, which includes ramp-up activities.
See also: Germany's Federal Network Agency Advances Hydrogen Core Network Financing
In its decision, the European Commission emphasized that promoting hydrogen uptake outweighs potential distortions to EU competition and trade. The Commission stated on Friday, “Encouraging the uptake of hydrogen outweighs any distortion to EU competition and trade from the scheme.”
Germany's ruling coalition, aligning with its hydrogen strategy, has extended the construction deadline for the network to 2037 and introduced measures to safeguard investors in case of financial difficulties, including bankruptcy protections.
See also: Italy, Germany, and Austria Collaborate on Southern Hydrogen Corridor
Hydrogen, derived from renewable sources like wind and solar power through electrolysis, is seen as a crucial carbon-free energy solution for heavy industries such as steel, chemicals, and refining. The planned network aims to span over 9,700 kilometers (6,000 miles), utilizing existing natural gas transmission lines for 60% of its infrastructure.
“The German pipeline network will need to connect wind power parks in the north to industrial centers in the south,” the Commission noted.
Future private sector operators of the hydrogen network are expected to recover their investments through user fees, ensuring sustainability and operational viability.
