Hydrogen projects outside the EU

published on 17th November 2021

The starting gun has been fired: After the Federal Government presented its National Hydrogen Strategy in June last year, the funding guideline of the Federal Ministry for Economic Affairs and Energy (BMWi) published on 27 September, prepared in cooperation with the Federal Ministry of Education and Research (BMBF), is now paving the way for a ramp-up of the global hydrogen economy. For this purpose, the Federal Government will provide a total of 350 million euros by 2024.

With the amendment to the Climate Protection Act, Germany has set itself the goal of becoming climate-neutral by 2045. This will require a strong increase in imports of sustainably produced energy sources or – as the Federal Government put it – „green” hydrogen. The government currently estimates that demand for this energy source will be around 90-110 TWh by 2030, of which 14 TWh will be produced domestically. The remaining part should be covered from imports, for which the above-mentioned funding guideline determines the legal basis as regards funding. The primary objective is the timely and sustainable development of a global market for green hydrogen and the achievement of the resulting price reduction through economies of scale.

Eligible for funding are exclusively projects that are carried out outside the geographical borders of the European Economic Area in cooperation with local actors and serve the production, storage and transport of green hydrogen and its derivatives. The level of funding varies depending on the object of funding or the entity applying for funding. For example, for an experimental development project, a company can apply for a non-repayable grant of 25 per cent and up to 15 million euros of eligible costs for equipment, personnel and ancillary costs.

In contrast, in the area of industrial applications, 30 or 45 percent of the additional investment costs for the provision of energy from renewable sources are eligible for subsidies, depending on the existence of comparable but less environmentally friendly technologies. The maximum funding rates are higher by 10 percentage points for medium-sized enterprises and by 20 percentage points for small enterprises.

For basic and industrial research projects carried out by research and science institutions, the guideline provides funding of up to 5 million euros per applicant and project. Up to 100 per cent of project-related eligible expenses can be subsidised. Collaborative projects that serve both the industrial application of hydrogen and basic research that goes beyond this can also benefit from the financial support offered by the state.

By way of this funding guideline, the Federal Government is pursuing not only the ramp-up of the global hydrogen economy, but also the goal of promoting the domestic development of hydrogen technologies and its production, as well as setting global standards as the world market leader for these products. In this respect, projects can achieve assessment advantages with regard to their eligibility for funding if they strengthen Germany’s attractiveness as the location for production of hydrogen technologies, contribute to the development of a domestic import structure or show professional and academic synergy effects along the entire value chain.

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