European Commission Funds €134 Million to Germany’s BASF for Renewable Hydrogen

The European Commission has announced the approval of a €134 million to support Germany’s BASF SE for the production of renewable hydrogen, with the aim of decarbonising its chemical production processes and of promoting hydrogen use in the transport sector.

EC said that the measure contributes to the achievement of the EU Hydrogen Strategy and the European Green Deal targets, while helping reduce dependence on Russian fossil fuels and fast forward the green transition in line with the REPowerEU Plan. The €134 million grant has been given under EU State aid rules.

Today’s decision follows the approvals on 15 July 2022 and on 21 September 2022 of two Important Projects of Common European Interest (IPCEI ‘Hy2Tech’ and IPCEI ‘Hy2Use’) in the hydrogen value chain. BASF’s project was selected by Germany in the context of an open call to form part of an IPCEI on hydrogen technologies and systems, which resulted in the two approved IPCEIs. However, given its characteristics and objectives, it was better suited for assessment under the Guidelines on State aid for climate, environmental protection and energy 2022.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said, “The measure approved today will also help Germany replace fossil-based hydrogen in a hard-to-decarbonise industry, and reduce its dependence on imported fossil fuels, in line with the REPowerEU Plan.”

BASF: The German Measure

The measure will support BASF’s production of renewable hydrogen mainly to replace fossil-based hydrogen in BASF’s chemical production processes. Additional renewable hydrogen produced will be delivered for emerging hydrogen mobility applications like hydrogen-powered trucks or buses.

The statement said that the aid, which will take the form of a direct grant, will support the construction and installation of a large-scale electrolyser at BASF’s Ludwigshafen site, which will have an annual production capacity of 54 MW and produce approximately 5,000 tonnes of renewable hydrogen and 40,000 tonnes of oxygen per year. The electrolyser will start operating in 2025.

EC said that the project is expected to avoid the release of 565,305 tonnes of carbon dioxide over the 15 years of expected operation of the electrolyser.