Commission approves Germany’s €3bn hydrogen network finance plan

The European Commission has approved Germany’s plans to spend €3bn on supporting the construction of its planned 9,700km hydrogen core network (HCN).

Planned to act as the backbone of long-distance transport pipelines for hydrogen in Germany, the HCN will connect hydrogen production centres with industrial users, storage facilities, power plants and import corridors.

Under the original plans announced by Berlin last November, 60% (5,820km) of the total network length will be converted natural gas pipelines, with the remaining 3,880km expected to be new dedicated hydrogen pipelines – which will be supported by the German financing scheme.

Read more: 9,700km hydrogen network planned for Germany

The construction aid will take the form of a state guarantee to allow transmission system operators (TSOs) to secure “more favourable loans,” to cover initial losses in the HCN’s ramp-up phase.

“At first, Germany expects only a small number of consumers to be using the network, and the tariffs will be lower than otherwise needed to cover relevant costs, to encourage this use and facilitate the uptake of hydrogen,” the Commission said.

With TSOs due to be selected by the German network agency Bundesnetzagentur, the loans will have to be paid back by 2055.

The entire network is expected to be completed in 2032, with the Commission saying it will complement its Important Projects of Common European Interest (IPCEI).

Margrethe Vestager, Executive Vice-President in charge of competition policy, said core pipeline networks for hydrogen were “crucial” to trigger investments in hydrogen production and consumption.

“The German scheme approved today will significantly contribute to the development of a European hydrogen market while minimising any potential distortions to competition,” she said.