€4 billion for French low-carbon hydrogen
A “necessary and appropriate” program with “limited impact on competition and trade within the EU.” For these reasons, on 23 March, the European Commission approved, under EU State aid rules, France’s new incentive scheme for low-carbon hydrogen.
An initiative worth €4 billion that aims to make the low-carbon version of the energy carrier competitive with its fossil-fuel counterpart for a 15-year period. How? By offering production aid awarded through auctions with the stated goal of developing approximately 1 GW of electrolysis capacity within its borders.
“This French program to support low-carbon hydrogen – commented Teresa Ribera, Executive Vice-President for a Clean, Just and Competitive Transition – represents an important step to strengthen Europe’s clean industrial future. The aid will support the most cost-effective projects, minimizing distortions of competition and trade in the internal market.”
The national hydrogen strategy
The incentive scheme is part of the Stratégie nationale hydrogène, launched in 2020 but updated last April 2025 to address a series of structural changes affecting the global H2 market. This update revised the initial ambitions downwards, both in terms of timelines and objectives, given the difficulty in implementing planned projects.
The cause? The same one that has slowed down the hydrogen economy at a European level despite excellent intentions: incomplete technological maturity, still high production costs, and industrial hydrogen demand lower than supply.
However, Paris does not want to abandon the goal of energy and industrial sovereignty in the sector, and the new Stratégie nationale hydrogène merely dilutes targets rather than cancelling them. Today, France aims to develop an electrolysis capacity of 4.5 GW by 2030, scaling up to 8 GW by 2035. In this context, the new scheme appears fundamental to support at least 1 GW of new electrolyzers out of the planned 4.5 GW.
Incentives for low-carbon hydrogen
The French program will support the construction of new electrolysis capacity by directly incentivizing production rather than investments. The scheme includes a competitive bidding procedure structured in three phases. The first auction will cover 200 MW of capacity with an estimated budget of €797 million. The hydrogen produced under this program will be sold exclusively for direct industrial use, to limit its application to cases where economically sustainable electrification alternatives do not exist.
The aid will take the form of a fixed premium and the contracts will have a duration of 15 years. To benefit from the contributions, however, beneficiaries must demonstrate compliance with EU criteria for the production of renewable fuels of non-biological origin (“RFNBOs”) and low-carbon fuels, as established in the delegated act on renewable hydrogen and the recent delegated act on low-carbon hydrogen.
The Commission assessed the scheme under EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the EU, which allows Member States to support the development of certain economic activities under certain conditions, and the 2022 Guidelines on State aid for climate, environmental protection and energy (“CEEAG”).
Other French measures on hydrogen
In parallel, the Government also aims to stimulate other phases of the value chain. For this reason, the updated strategy includes the relaunch of the call for projects “Technological building blocks for hydrogen IDH2” to support the development of critical elements of H2 technologies. Concurrently, a new public notice has been announced for the selection of projects aimed at deploying light commercial vehicles powered by hydrogen, and support measures for project studies on synthetic fuels.
Priorities also include the creation of an “intra-hub” network to connect producers and consumers and a new regulatory framework to simplify the authorization process.
Last but not least, France has decided to focus on professional-technical training in the field. How? With the “H2 School” project, it will develop, structure, and finance 90 existing training programs that already offer courses on hydrogen.