Spain-France Hydrogen Link Poised to Receive EU Funding for Green Shift

(Bloomberg) -- A planned multibillion-euro hydrogen link between Spain and France is set to qualify for European Union aid as a cross-border project that is key to the bloc’s energy transition.

The Bar-Mar pipeline from Barcelona to Marseille — which could be expanded to Berlin — would be eligible for green-infrastructure financing, following discussions Friday by the European Commission, according to people with knowledge of the talks.

A separate hydrogen link between Portugal and Spain would also qualify, said the people, who weren’t authorized to speak publicly. Other projects that got the tentative green light for financing include Nordic pipelines that would bring Swedish and Finnish renewable hydrogen into Germany. The aid supports energy projects between member states that integrate clean technologies.

The European Commission declined to comment.

The EU is betting on hydrogen as a way to reduce emissions and meet its Green Deal target of achieving climate neutrality by 2050. The preliminary list of eligible projects drafted on Friday is expected to be endorsed by member states later this month before the European Commission formally proposes it as a regulatory act.

Gas network operators in Spain, France and Portugal in December submitted an application to receive funding under the European Hydrogen Backbone initiative. Spain’s Enagas SA has said it expects investment of as much as €4.67 billion ($5.11 billion) to develop a hydrogen infrastructure in the country.

Several companies — including Europe’s top clean-energy developer Iberdrola SA and refiner Cepsa, which is controlled by Abu Dhabi’s sovereign wealth fund Mubadala — have announced projects to produce green hydrogen. 

The undersea pipeline network from Portugal and Spain to France — known as H2Med — could transport about 10% of the EU’s hydrogen needs by 2030. It was agreed by the countries, with the backing of Germany, in October.

(Updates with request for comment in fourth paragraph. An earlier version of this story contained a correction to the investment dollar amount.)

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