Italy to receive €100m in European Commission funding for electrolyser production

London: Italy will receive €100m in funding for electrolyser production after the European Commission approved the scheme under the Temporary Crisis and Transition Framework, a European state aid project available to member states.

The aid will take the form of direct grants, with the purpose of building capacities for the production of strategic equipment necessary for the diversification of energy sources.

The funding is available to all sectors, except for financial institutions. The Italian government has not made more details public regarding the projects the aid will target.

Italy applied for the scheme in August. Following this, the commission concluded that the Italian scheme is necessary for the green transition and important for the implementation of the REPower EU Plan and the Green Deal Industrial Plan.

The funding needs to be granted by 31 December 2025. Otherwise, Italy risks losing the state-aid approval, which has been introduced as a temporary measure in response to Russia’s invasion of Ukraine.

A possible project for the state aid scheme could be the H2 Laguna project announced by Alpiq, San Marco Petroli, and Sinloc in September. The companies will run a feasibility study for the development of a 10MW electrolyser plant that will supply hydrogen to regional transport companies to decarbonise water transportation in Venice Bay.

Further electrolyser development could aid Italian hydrogen supply tightness in the long run. Hydrogen demand in Italy is set to reach 26.65TWh by 2030 and reach 85.48TWh by 2050. A supply shortfall of 73.52TWh is expected by then, with Italy set to import vast amounts of hydrogen to balance domestic demand.

To this end, plans for a hydrogen corridor between Italy and North Africa have been put in place. The SoutH2-Corridor is expected to come online by 2030 and will transport renewable hydrogen from Morocco, Algeria, and Tunisia to Europe via Italy.