Italy plans €400mn to boost hydrogen economy

Government funding to support renewable and biogenic hydrogen production for industry and transport.

Italy is preparing to launch a national hydrogen subsidy programme later this year, putting as much as €400 million ($462mn) annually behind renewable and biogenic hydrogen production for industry and transport.

The scheme, run by the Ministry of Environment and Energy Security through energy agency GSE, will hold competitive auctions at least twice a year through 2029. The European Commission approved it in March under EU state-aid rules, and Italy estimates the resulting 15-year support commitments could cost around €6 billion [US$6.93 billion] over their full duration.

Each round will initially cover three categories: RFNBO hydrogen projects with electrolysers of 10MW or less, larger RFNBO projects, and bio-hydrogen from renewable biological feedstocks. Maximum starting strike prices are €13/kg for smaller RFNBO projects, €11/kg for larger ones and €10/kg for bio-hydrogen, with developers competing by discounting against those ceilings.

"This mechanism will support the most efficient investments," Environment and Energy Security Minister Gilberto Pichetto said.

The first auction is expected to cover around 20,000 tonnes of RFNBO hydrogen, split evenly above and below the 10MW threshold, plus roughly 1,300 tonnes of bio-hydrogen. The scheme is designed around procurement of up to 200,000 tonnes of renewable hydrogen annually over time, though that figure is an overall ambition rather than volume already contracted. RFNBO hydrogen must deliver at least a 70% lifecycle greenhouse-gas reduction against the EU's fossil-fuel benchmark.