On Thursday 31 October 2024, Luxembourg's Ministry of the Economy launched a call for projects aimed at encouraging companies to produce renewable hydrogen in Luxembourg.
This call for projects, with a total budget of €110 million, is part of the government's initiative to support energy transition and reduce dependence on fossil fuels, by promoting sustainable and innovative solutions. The application period runs from 31 October 2024 until 15 February 2025.
The Minister of the Economy, SMEs, Energy and Tourism, Lex Delles, welcomed the initiative, stating: "This call for projects embodies Luxembourg's desire to promote a resilient and environmentally friendly energy model. By supporting innovative and sustainable initiatives, the Ministry of the Economy intends to strengthen skills in hydrogen as an energy vector of the future in order to be able to meet climate challenges and European ambitions for carbon neutrality."
Part of the €110 million budget will be dedicated to investment aid and the other to operational aid, to support the installation of approximately 12 MW of electrolysis capacity to produce renewable hydrogen.
Unlike a traditional call for tenders, this call for projects does not involve direct competition. However, a ranking of projects is planned, with competitive mechanisms taking effect as soon as the maximum budget is reached. The analysis of the project files and the allocation of aid will be carried out by the Ministry of Economy, with a decision expected, in principle, by the end of May 2025.
Eligible projects must meet specific criteria:
- The project must produce renewable hydrogen.
- Applicants must identify and contract potential consumers for the hydrogen produced, thus ensuring revenue for the project.
- Application for State aid: the amount of aid will cover the gap between production costs and the revenue generated by the marketing of the product. This aid will be divided into two parts: investment aid, covering up to 45% of eligible costs and operating aid, capped at €7/kg (H₂), with a “bonus” of €3/kg (H₂) for additional renewable energy production capacities installed.
- Ceilings and accumulation of aid: national aid may not exceed €30 million per project and may be combined with aid from the European Union.
- Capacity and deadline: installations must have an electrolysis power of between 100 kW and 6 MW, be commissioned within three years, and provide a progressive bank guarantee in the event of non-compliance with the deadlines.
Luxinnovation will monitor the projects in a similar way to other calls for projects, by offering free support to interested candidates to help complete their application.
Details and practical arrangements of this call for projects are to be explained in a free information webinar which will be organised with the support of Klima-Agence and the national innovation agency, Luxinnovation, in the coming weeks.
