(Brussels / Belgium) – The European Commission has approved a German aid scheme worth three billion euros for the construction of the hydrogen core network. This will enable the development of a long-distance pipeline infrastructure for hydrogen and is part of the basic European structure that connects several member states.
Facilitate investments
The measure aims to facilitate investment in the construction of the hydrogen core network for converting existing natural gas pipelines to hydrogen, as well as the construction of new pipelines and compressor stations. As previously reported, the construction and operation of the hydrogen core network will be financed by the transmission system operators; the Federal Network Agency will develop the detailed terms and conditions.
The aid will enable companies to obtain cheap loans through a state guarantee to cover losses at the beginning of the ramp-up phase. Germany expects only a small number of network users at the beginning, so the fees will initially be lower than necessary to cover costs. This is intended to promote the use of the network and the ramp-up of the hydrogen market.
Interest rates below market rate
The loans will be granted by the Kreditanstalt für Wiederaufbau (KfW) at its own refinancing costs, which means interest rates are below market rates, and are to be repaid by 2055. The estimated aid amount of three billion euros corresponds to "the additional financing costs that the transmission system operators would have to bear without the state guarantee," according to the Commission. The first major line is to be put into operation in 2025 and the entire core network is to be completed in 2032.
This measure complements several important projects of common European interest (IPCEI), in particular the €6,9 billion “Hy2Infra” project approved by the Commission in February 2024 , thereby increasing the overall funding impact for hydrogen infrastructure in Germany and Europe.
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The EU Commission approves aid scheme for investments in the German hydrogen core network. © EU Commission
