European Commission Approves €220 Million Aid for Clean Hydrogen Production in Spain

The measure significantly reduces Europe’s dependence on Russian fossil fuels


The European Commission, under the European Union (EU) State aid rules, has approved a €220 million (~$215.3 million) Spanish measure to support Cobra Facilities & Services (COBRA) in the production of renewable hydrogen.

The Spanish measure significantly reduces Europe’s dependence on Russian fossil fuels and will help the green transition aligned with the REPowerEU Plan.

The Commission received the notice from Spain over the latter’s plan to support COBRA and commence clean hydrogen production at a large scale through water electrolysis.

The external industrial offtakers, primarily in energy-intensive and hard-to-abate sectors like refineries and ceramics, will use the renewable hydrogen produced.

In the form of a direct grant, the aid will support the construction and installation of two electrolyzers totaling 205 MW in the Spanish regions of Cartagena and Castellón. The electrolyzers are expected to produce approximately 8,550 tons of clean hydrogen and 6,840 tons of oxygen annually.

The first electrolyzer will be operationalized by 2023. Once completed, the project is expected to avoid the release of 47,038 tons of carbon dioxide every year.

The project is among the early adopters of innovative technology in the sector. The European Commission assessed the measure under the respective articles of EU State aid rules which enables member states to support the development of certain economic activities and the guidelines on aid for climate, environmental protection, and energy.

If the project is successful, generating extra net revenues, the company will return part of the aid received to Spain (a claw-back mechanism). The aid brings about positive effects that outweigh any potential distortion of competition and trade in the EU.

In July this year, the European Commission approved €5.40 billion (~$5.47 billion) in funding for the IPCEI Hy2Tech project to support research, innovation, and the first industrial deployment in the hydrogen technology value chain.

The European Commission is investing €1.8 billion (~$1.804 billion) in 17 large-scale innovative clean energy projects worldwide. The 17 selected projects worldwide will bring breakthrough technologies in energy-intensive industries, hydrogen, renewable energy, carbon capture, and storage infrastructure.