The European Commission approved a €6 billion Italian support scheme for renewable hydrogen production, with biomass-derived hydrogen explicitly included among eligible technologies.
The program, running through the end of 2029, aims to support annual production of 200,000 tonnes of renewable hydrogen for transport and industrial applications.
Eligible projects include hydrogen produced via electrolysis powered by renewable electricity, as well as hydrogen derived from biomass through biological, bio-thermochemical, and thermochemical processes. That covers a range of conversion technologies using organic feedstocks.
Support will be delivered through two-way contracts for difference determined by competitive tender. If the price of an alternative fuel falls below the agreed strike price, Italy pays producers the difference. If it exceeds the strike price, producers repay the excess to the state.
The Commission concluded the aid is both necessary and proportionate. It found that producers wouldn’t develop renewable hydrogen capacity without public support, and that environmental benefits, particularly for hard-to-decarbonize sectors, outweigh competitive distortions.
Teresa Ribera, executive vice president for clean, just and competitive transition, said the scheme would direct support toward sectors where hydrogen can contribute most to emissions cuts.
The approval falls under the Commission’s 2022 state aid guidelines for climate, environmental protection, and energy. Those guidelines provide the framework for member states to support Green Deal objectives.
Italy’s inclusion of biomass pathways is notable. While most renewable hydrogen discussion focuses on electrolysis powered by wind and solar, biological and thermochemical routes using organic waste and agricultural residues represent alternative production methods.
Whether biomass-derived hydrogen can compete cost-effectively with electrolysis at scale remains an open question.
