Three large-scale hydrogen projects will receive funding from the EU’s Innovation Fund, which is investing a total of €1.1bn ($1.25bn) in seven projects as part of its latest spending round.

The Innovation Fund—financed with proceeds from the EU emissions trading scheme (ETS)—will support up to 60pc of projects’ costs “linked to innovation”. This includes capex and opex for up to ten years.

“Today's decision gives concrete support to clean-tech projects across Europe and enables them to scale up game-changing technologies that support and speed up the transition to climate neutrality,” says European Commission executive vice-president Frans Timmermans.

€1.1bn – Total size of EU innovation funding pot

The first hydrogen project is in northern Sweden and is a collaboration between steelmakers SSAB and LKAB, and utility Vattenfall. The project aims to decarbonise steel production using ‘Hybrid’ technology. It will produce approximately 1.2mn t/yr of crude steel, representing 25pc of Sweden’s production and reducing greenhouse gas emissions by 14.3mn t CO₂ over the first ten years of operation.

The second project involves the creation of a carbon capture and storage value chain across Belgium, the Netherlands and Norway that will involve capture of CO₂ from two grey hydrogen plants and one ammonia plant, among others. The CO₂ will be transported via specially constructed vessels and stored under the North Sea, avoiding 14.2mn t CO₂ emissions in the first ten years of operation.

The third project—known as Sharc—will reduce emissions at Neste OIl’s Porvoo refinery in Finland by replacing grey hydrogen used in the refining process with green and blue hydrogen production. The operators hope the project will lay the foundation for a green hydrogen hub in the region to supply transport applications.

The other four projects to receive funding are to develop non-hydrogen renewables technologies. All the projects have total capital costs above €7.5mn. The commission runs a separate funding round for smaller projects.

The seven successful projects now negotiate individual grant agreements with the European Climate, Infrastructure and Environment Executive Agency, the Innovation Fund’s implementing body. The agreements are expected to be finalised in the first quarter of 2022.

On 26 October, the Commission launched the second call for large-scale projects, with a deadline of 3 March 2022. All the projects that were not successful in the first call are encouraged to re-apply.

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Author: Tom Young