The European Commission (EC) has approved state aid of €158 million to support the installation of a 100 MW electrolyzer and construction of a 50 MW solar PV with 20 MWh battery storage capacity in Poland saying the project will contribute to the EU Hydrogen Strategy.
Renewable hydrogen generated through this project will be used by oil refiner PKN Orlen SA for the production of renewable hydrogen in refinery production processes at its refinery in Gdańsk.
PKN plans to realize the project through a special purpose vehicle (SPV) called LOTOS Green H2 that will benefit from the aid given as a grant. The project is scheduled to come online in 2027 and gradually increase its production up to 13,600 tons of renewable hydrogen annually.
It promises to reduce GHG emissions in the energy-intensive and hard-to-abate refinery sector, helping avoid the release of 2.5 million tons of CO2 over its lifetime.
Poland selected the LOTOS project through an open call as part of the Important Projects of Common European Interest (IPCEI) on hydrogen technologies and systems.
In clearing the grant, EC found the aid has an incentive effect since PKN would not otherwise invest in renewable hydrogen production. At the same time, the beneficiary will return part of the aid received to Poland under a claw-back mechanism if it generates extra net revenues.
"This €158 million measure enables Poland to help LOTOS Green H2 in the deployment of renewable hydrogen production and allows for a partial decarbonization of refinery activities," said Executive Vice-President in charge of the Competition Policy, Margrethe Vestager. "This will contribute to the greening of a very energy-intensive sector, in line with our commitment to transition to a net zero economy."
The EU aims to produce 10 million tons of renewable hydrogen by 2030 and import 10 million tons by 2030 under its hydrogen strategy. This is expected to help build up to 120 GW solar and wind capacity (see European Commission Launches Hydrogen Strategy).
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