The Government Adapts the Regulatory Framework for Green Hydrogen Aid and Approves New Guidelines for the Decarbonization of Industrial Heat within European Auctions as a Service

(Ministry for Ecological Transition and the Demographic Challenge) In its second participation in the European Hydrogen Bank's AaaS scheme, Spain is contributing 440.5 million to finance more national renewable H2 production projects

The Council of Ministers, at the proposal of the Ministry for Ecological Transition and the Demographic Challenge (MITECO), today approved the modification of the regulatory framework for the direct granting of subsidies to Spanish projects participating in the Auction-as-a-Service (AaaS) schemes of the European Hydrogen Bank and the Industrial Decarbonization Bank, respectively. Spain is contributing a total of €490.5 million from its own funds under the Recovery, Transformation and Resilience Facility (RTFF) to both auctions organized by the European Commission's Innovation Fund.

The calls for proposals will subsidize, on the one hand, local green hydrogen production projects within the framework of the third European renewable hydrogen auction. And, on the other hand, initiatives to replace fossil fuels for process heat in industry with electrification solutions and/or direct renewable energy use, among those shortlisted in the first European Industrial Heat auction but which do not receive EU funding due to budget constraints.

This voluntary contribution of NextGenEU funds from the PRTR to the European auction-as-a-service mechanism will allow for the rescue and direct incentive of the best-ranked local projects – green hydrogen production and decarbonization of process heat in industry – on the respective waiting lists of the Community auctions.

The Institute for Energy Diversification and Saving (IDAE), attached to the MITECO, will manage both national calls for auctions as a service (AaaS) with an allocated budget of 440.5 million for renewable hydrogen, above what was initially planned, and 50 million for industrial heat.

GREEN HYDROGEN AND INDUSTRY

In what will be Spain's second participation in the European Hydrogen Bank's AaaS scheme, approximately €304.1 million will be allocated to initiatives for the production of renewable non-biological hydrogen (RFNBO). The remaining €136.4 million will support hydrogen production in projects linked to the maritime or aviation sectors, although in the case of Spain's contribution, this will be limited to supporting RFNBO production.

Joining the European Hydrogen Bank's auction system complements the full range of support instruments provided by the Government through the Ministry for Ecological Transition and the Demographic Challenge (MITECO) to make green hydrogen a key driver of our energy policy, crucial for decarbonizing industry, heavy transport, and other productive sectors. More than €3.1 billion from the PRTR (Regional Hydrogen Transition Fund) has already been allocated to the development of this energy vector and its associated value chain, including this new contribution.

For its part, Spain has been the only European country to commit a national contribution to the first auction for the decarbonization of industrial process heat launched by Brussels to support projects for the electrification of industrial heat (heat pumps, resistive heating, plasma heating, etc.), direct renewable heat (solar thermal or geothermal solutions), or hybrid systems combining electrification and renewable heat. These different types of projects are already being promoted within Spain's own energy transition strategy for industry under the PERTE ERHA and PERTE Industrial Decarbonization programs.

The 50 million from the auction as a national service will be distributed in two baskets defined in the conditions of the European auction: 30 million to the medium temperature (100-400 ºC) and low power (3-5 MWt) category, and 20 million to the medium temperature (100-400 ºC) and medium power (> 5 MWt) basket.

National aid will be allocated once the general auctions of the European Hydrogen Bank and the Industrial Decarbonization Bank are resolved.

TIGHTER TERMS

From the date indicated in the respective calls of the IDAE, any project that is on the reserve list of the Innovation Fund and is a potential beneficiary in the Spanish AaaS must submit the required administrative documentation and the execution guarantee within a maximum period of three weeks from the publication of the agreements of the investigating body that are published on the electronic headquarters of the Institute.

The purpose of this advance request is to allow the Spanish authorities to expedite the resolution of the grants in order to meet the deadlines set out in the Recovery and Resilience Facility (RRF).

SYNERGIES IN A SINGLE MARKET

The AaaS scheme allows member states to use these European auctions as a project selection mechanism. Once the auction at the EU level is resolved, countries that contribute additional funds, such as Spain, can reclaim pre-selected national projects that were left without funding when the funds allocated by Brussels were exhausted and allocate them with money from their voluntary contributions to the common fund.

With this instrument, member states can identify and support competitive projects in their territory that have not obtained Community funding, without having to hold their own national auctions, creating synergies between national and European support schemes, reducing the risk of early market fragmentation and increasing the comparability of support mechanisms. READ MORE