Under the scheme, renewable fuels of non-biological origin (RFNBOs) produced in Canada will be imported into Germany and sold on the EU market, thereby contributing to the objectives of the Clean Industrial Deal, the EU Hydrogen Strategy, and the REPowerEU plan. In its notification to the Commission, Germany stated that it will allocate a EUR 200 million budget to cost-effectively support RFNBO production in Canada.
This budget will also unlock an additional EUR 200 million in funding from the Canadian government. The scheme foresees the installation of up to 300 MW of electrolyser capacity, with funding to be awarded through a competitive tender process expected to be completed in 2027. Germany estimates that the plan will avoid a total of 2.47 million tonnes of CO₂ equivalent emissions, contributing to the country’s EU climate targets. The scheme is based on a double-sided auction mechanism matching producers in Canada with buyers in the EU: producers bid the lowest selling price, buyers bid the highest purchase price, and the gap between the two is covered by state aid.
The Commission assessed the support under EU State aid rules and concluded that the measure is necessary, appropriate and proportionate to increase RFNBO production. It also found that the scheme has an incentive effect, meaning that beneficiaries would not carry out the investments without public support. The Commission further positively assessed Germany’s commitments to ensure open, transparent and non-discriminatory tender conditions, to limit aid to the minimum necessary, and to put safeguards in place against the risk of double funding. On this basis, the Commission approved the German scheme as compatible with EU State aid rules.
This support mechanism follows two previous schemes approved by the Commission in 2021 and 2024 aimed at supporting renewable hydrogen production in non-EU countries. Under the Renewable Energy Directive, RFNBO production must deliver at least 70% greenhouse gas emission savings, and a 2023 legislative update increased the EU’s 2030 renewable energy target to 42.5%.
In addition, a target has been set for 42% of hydrogen used in industry to come from renewable sources by 2030. The new German scheme is expected to support the large-scale rollout of renewable hydrogen production beyond 2030, in line with the EU’s goal of expanding renewable hydrogen supply.
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