Germany's Hydrogen Support Fund Gets EU Approval

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Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

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Summary

A German government financial aid package worth 1.3 billion euro (US$1.5 billion) for renewable hydrogen projects located in Denmark has received approval from the European Commission (EC).

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Plan Lets Germany Invest Heavily in Danish Hydrogen

The German government's proposal to back renewable hydrogen projects in Denmark with a 1.3 billion euro (US$1.5 billion) fund has been green lit by the European Commission (EC). According to Industrial Info Resources data there are 24 active green hydrogen projects in Denmark worth just under US$7 billion in investment. Subscribers to Industrial Info Resources' Global Market Intelligence (GMI) Project Database can click here for the reports.

The proposed plan will let Germany invest heavily to back clean hydrogen and infrastructure projects in Denmark that will be connected to the Danish Hydrogen Backbone 1 pipeline and deliver it to buyers connected to the German Hydrogen Core Network (HCN). Both nations' hydrogen pipelines and networks are currently under construction and have been designated by the EC as Projects of Common Interest (PCIs) designed to accelerate cross-border integration. The approved scheme will support construction of up to 1,000 megawatts (MW) of installed electrolyzer capacity and Europe's goal to produce up to 10 million tonnes of renewable hydrogen by 2030. This is estimated to avoid up to 55 million tonnes of CO2, the EC stated. 

Project Benefits

The Commission found that the scheme was "necessary and appropriate to facilitate the production of renewable hydrogen" and that it would not unduly distort competition rules because funding Danish projects connected to the Danish pipeline to supply buyers in Germany connected to its Hydrogen Core Network supported an infrastructure that "will lower the cost of renewable hydrogen in the long term". 

It also stated that the scheme has an incentive effect, as the beneficiaries would not carry out the relevant investments without the public support. The Danish hydrogen network, owned by Energinet, runs for 133-kilometers (km) from western Denmark to the German border in the south while the much larger German Hydrogen Core Network (HCN)--Europe's largest--will eventually span just over 9,000 km. 

Teresa Ribera, executive vice president for Clean, Just and Competitive Transition, commented: "This investment in renewable hydrogen production is a step towards Europe's decarbonisation goals. The scheme will increase the supply of clean hydrogen and also support the building of cross-border infrastructure to connect production in the North Sea with industrial users elsewhere."

Funding Allocation

Germany will allocate the funding through the 'Auctions-as-a-Service' tool within the European Hydrogen Bank. The European Hydrogen Bank was launched in 2023 as a financing instrument, to unlock private investments in hydrogen value chains, both within the EU and globally, by connecting renewable energy supply to EU demand and addressing the initial investment challenges. 

EU Goals Vs. Reality 

The EU wants to produce 10 million tonnes of clean hydrogen and import 10 million tonnes by 2030. In 2022, hydrogen accounted for less than 2% of Europe's energy consumption and was primarily used to produce chemical products, such as plastics and fertilizers. Ninety-six percent of this hydrogen--gray hydrogen--was produced from natural gas, resulting in significant amounts of CO2 emissions. To produce 10 million tonnes of green hydrogen, the EU will need 40 gigawatts (GW) of renewable hydrogen electrolyzers by 2030.

However, data from Hydrogen Europe, the association representing Europe's hydrogen suppliers, suggests that the EU will only be able to supply slightly more than half of the green hydrogen it needs to meet its 2030 targets. In addition, it noted that only a quarter of announced projects are currently under construction. In 2020, the EU set a goal of having 6 gigawatts (GW) of electrolysis capacity installed by 2024 but fell massively short with just 600 megawatts (MW) operational and only 2.8 GW under construction as of July 2025. For additional information, see October 15, 2025, article--Europe's Green Hydrogen Dream Not Matching Reality.

Key Takeaways

• Germany's 1.3 billion-euro fund (US$1.5 billion) for green hydrogen projects approved by the European Commission (EC). 
• The approved scheme will support construction of up to 1,000 megawatts (MW) of installed electrolyzer capacity.
• Industry analysis suggests that the EU will only be able to supply slightly more than half of the green hydrogen it needs to meet its 2030 targets. 

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