The European Union has signed off on a €6 billion Italian support scheme for renewable hydrogen, aimed at the transport and industrial sectors. The European Commission confirmed the plan complies with EU State aid rules.

According to the Commission, the programme backs both the EU’s hydrogen strategy and its clean industry goals. Italy is targeting the production of 200,000 tons of renewable hydrogen a year. The support covers hydrogen made via electrolysis using renewable electricity, as well as hydrogen from biogenic sources through biological, thermochemical, and bio-thermochemical processes.

Under the scheme, aid will be delivered through two-way contracts for difference. A reference price for hydrogen will be set through a competitive bidding process. If market prices for alternative fuels fall below that level, Italy will pay hydrogen producers the difference.

The programme is set to run until December 31, 2029. The European Commission is tasked with ensuring that the aid does not have negative effects on competition.