Brussels has greenlit Italy’s plans to spend €6bn ($6.9bn) on green hydrogen production for transport and industrial applications as the country looks to meet its renewable energy directive (RED) III mandates.
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.