European Commission has given the green light to a €140 million Portuguese scheme designed to catalyze the production of renewable hydrogen and biomethane.
Aligned with the Green Deal Industrial Plan, this initiative aims to accelerate the transition to a net-zero economy, addressing critical sectors to propel the green transition and diminish fuel dependencies.
The primary goal of the approved scheme is to offer financial support to producers engaged in the production of renewable hydrogen and biomethane. The aid will be structured as a variable premium within a two-way contract for difference, spanning a duration of 10 years. This unique approach, fostered through a competitive bidding process, encourages producers of renewable hydrogen and biomethane to vie for support.
The competitive bidding process is a cornerstone of the scheme, ensuring a fair and efficient allocation of aid. Producers in the renewable hydrogen and biomethane sectors compete separately, presenting their strike price per MWh. The Commission emphasized that the conditions set within the bidding process include safeguards to uphold competitiveness, creating a level playing field for all participants.
The European Commission’s approval comes with specific conditions and safeguards outlined in the Temporary Crisis and Transition Framework. The aid will be based on a scheme with a predefined capacity volume and budget, in the form of a two-way contract for difference, and granted no later than December 31, 2025. These measures are strategically implemented to prevent undue distortions of competition and guarantee the competitiveness of the bidding procedure.
The Commission’s conclusion underscores the necessity, appropriateness, and proportionality of Portugal’s scheme. Positioned as a critical driver to accelerate the green transition, this initiative aligns seamlessly with the REPower EU Plan and the overarching Green Deal Industrial Plan, both instrumental in shaping Europe’s sustainable future.