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EU’s Public Consultation on New State Aid Framework for Clean Energy

The European Commission has launched a public consultation on the New State Aid Framework, which will support clean energy investments under the Clean Industrial Deal Communication. The framework outlines aid measures for hydrogen (H2) and carbon capture (CO2/CCU) projects to align with EU climate goals.

Key Provisions for Renewable Energy & Hydrogen

• Support for Renewable Energy Production: Investments in renewable fuels of non-biological origin (RFNBOs), biofuels, biogas, and biomass fuels will be eligible, except for electricity production from RFNBOs.
• Storage Investment Support: Projects storing RFNBOs, biofuels, or biogas must ensure at least 75% of content comes from a directly connected renewable production facility.
• Compliance with RED II: Any RFNBO production must strictly follow methodologies set under RED II and its regulations.

Project Timelines & Renewable Hydrogen Conditions

• 36-Month Completion Window: Except for offshore wind, hydropower, and renewable hydrogen projects, all supported projects must be completed within 36 months of aid approval. A penalty system will be in place for delays.
• Hydrogen Investment Restrictions: State aid will apply only to projects using:
  • 100% renewable hydrogen or
  • A mix of renewable hydrogen, sustainable biomass-based hydrogen, and low-carbon hydrogen.

Conditions for Carbon Capture & Storage (CCS/CCU)

• Net-Zero Compliance: Carbon capture investments must connect to a Net-Zero Industry Act CO2 storage project or a complete CCS/CCU chain.
• GHG Emission Reductions: Projects must demonstrate direct emission avoidance across the entire CCS/CCU process.

This consultation marks a significant step toward strengthening EU clean energy financing, ensuring renewable-based hydrogen and carbon capture projects align with decarbonization goals.