The European Commission said the scheme, aimed at supporting 200,000 tonnes of green hydrogen production per year, will offer two-way contracts for difference to subsidise production costs.
However, it is not yet clear whether the €6bn budget will be fully utilised to deliver the targeted 200,000 tonnes per year, with actual funding needs likely to depend on auction results.
Producers will be offered a strike price through a competitive bidding process, where they will be paid the difference between consumer costs and the strike price. If the hydrogen prices exceed the strike price, producers will pay the difference back to the state.
Hydrogen producers using renewable-powered electrolysis and biogenic sources will be eligible under the measure.
Italy has not yet announced when the competitive bidding will start. However, the scheme is expected to run until 31 December 2029.
It comes after the country transposed EU-made targets for green hydrogen consumption in transport and industry under RED III in full.
The targets mandate that 42% of all hydrogen used in industry will need to be renewable fuels of non-biological origin (RFNBO) by 2030. In transport, RFNBOs will need to make up 1% of all energy consumed by 2030.
Despite a national hydrogen strategy aiming for 5GW of electrolysis capacity by 2030, Italy’s current green hydrogen production remains limited.
According to gasworld intelligence, the country has just 27 tonnes per day of current green hydrogen production.
Competitions Commissioner, Teresa Ribera, said the €6bn scheme will help Italy use hydrogen “where it can contribute the most to reducing emissions.”
It will add to other major funding schemes in the country, including €994m ($1.14bn) for projects on the EU’s important projects of common European interest list, €550m ($632m) for industrial decarbonisation, €1.1bn ($1.26bn) for green manufacturing, and €317m ($364m) for AEM electrolyser development.
