Commission approves €2.2 billion German State aid scheme to support the decarbonisation of industrial processes to foster the transition to a net-zero economy
The European Commission has approved a €2.2 billion German scheme to support investments in the decarbonisation of industrial production processes to foster the transition to a net-zero economy, in line with the Green Deal Industrial Plan. The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on 9 March 2023 and amended on 20 November 2023, to support measures in sectors which are key to accelerate the green transition and reduce fuel dependencies.
Germany notified to the Commission, under the Temporary Crisis and Transition Framework, a €2.2 billion scheme to support (i) investments in the electrification of industrial processes, as well as (ii) investments enabling the substitution of fossil fuels with renewable hydrogen or renewable hydrogen-derived fuels, to foster the transition to a net-zero economy. Under this measure, the aid will take the form of direct grants. The measure will be open to companies relying on the use of fossil fuels as energy source or feedstock for their production processes in the industrial sector in Germany. Eligible projects must lead to a reduction of greenhouse gas emissions from production processes of at least 40%, compared to today. To be eligible, companies need to either electrify their production processes, or switch from the use of fossil fuels to renewable hydrogen or renewable hydrogen-derived fuels.
The Commission found that the German scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This €2.2 billion scheme will support industries in investing further into the decarbonisation of their industrial processes. This will help accelerate the green transition. The measure will also help Germany to reduce its dependence on imported fossil fuels faster, in line with the REPowerEU Plan, while ensuring that potential competition distortions are kept to the minimum.”
