European Commission approves $1B French scheme for biomass and renewable hydrogen state aid

In Belgium, the European Commission has approved a €900 million French scheme to support companies investing in the use of biomass and renewable hydrogen in energy and fuel production, to foster the transition towards a net-zero economy in line with the Green Deal Industrial Plan. The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on March 9, 2023 and amended on November 20, 2023, to support measures in sectors which are key to accelerate the green transition and reduce fuel dependencies.

France notified to the Commission, under the Temporary Crisis and Transition Framework, a €900 million scheme to support the production of (i) heat and fuels from biomass, such as synthetic gas and biochar, for use in industrial processes, and (ii) liquid fuels from biomass and renewable hydrogen, for use in industrial processes and transport.

Under this measure, the aid will take the form of direct grants, covering part of the eligible investment costs. The measure will be open to new installations and projects that are significantly accelerated or scaled up. Projects will have to be completed and put in operation within 36 months from the granting of the aid.

The Commission found that the French scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework. In particular, the aid (i) will incentivize the production of energy and fuel from renewable sources; (ii) will not exceed the maximum aid intensity allowed; and (iii) will be granted no later than 31 December 2025.

The Commission concluded that the French scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of REPowerEU Plan and the Green Deal Industrial Plan, in line with Article 107(3)(c) TFEU and the conditions set out in the Temporary Crisis and Transition Framework. On this basis, the Commission approved the aid measure under EU State aid rules.