Frankfurt: The European Commission has approved approximately 3 billion euros ($3.2 billion) in planned state aid from Germany to establish a hydrogen pipeline network known as the Hydrogen Core Network (HCN).
Berlin intends to provide financial guarantees to enable companies involved in constructing and operating the 20 billion euro network to secure more favorable loans. This support aims to offset initial operational losses during the ramp-up phase starting in 2025.
In its decision issued on Friday, the Commission emphasized that promoting hydrogen adoption outweighs potential distortions to EU competition and trade posed by the initiative.
In April, Germany’s governing coalition agreed on the funding mechanism, extending the construction timeline by five years to 2037 and offering investor protections in case of bankruptcy.
Many countries are turning to hydrogen, derived from renewable sources like wind and solar power, as a crucial, storable form of green energy to achieve net-zero greenhouse gas emissions. Hydrogen is particularly valued in heavy industries such as steel, chemicals, refining, and ceramics for its potential to serve as a practical, carbon-free energy alternative.
Also Read | US Lawsuit Focuses on TikTok’s Handling of Children’s Privacy
Germany’s ambitious plans envision over 9,700 kilometers (6,000 miles) of hydrogen pipelines, utilizing existing natural gas infrastructure for 60% of the network. This infrastructure will support industrial sites that cannot feasibly transition to electricity.
Green hydrogen production, involving electrolysis powered by renewable energy, will connect northern wind farms to southern industrial hubs via the German pipeline network. Future private sector operators aim to recover their investments through user fees.
