What will hydrogen promotion bring?

With the draft Hydrogen Promotion Act (WFöG), Austria is sending a clear signal regarding the future role of green hydrogen in the national energy system. 400 million euros in funding are planned over a period of 10 years. The law went into review on February 26th, 2024. Comments had to be submitted by March 25th, 2024.

Objectives of the law

To achieve climate neutrality in Austria by 2040, further measures must be taken. The production and use of renewable (“green”) hydrogen are important components that can ensure climate neutrality, especially in sectors that are difficult to decarbonize, and can significantly support the path to a renewable energy system in Austria.

The primary objective of the WFöG is to increase the production of “renewable hydrogen of non-biogenic origin.” The draft law defines the term “renewable hydrogen of non-biogenic origin” as hydrogen that is produced using energy from renewable sources, with the exception of biomass. The definition was adopted from the EU’s Renewable Energy Directive (RED III).

Currently, Austria has an electrolysis capacity of 12 megawatts. The Austrian hydrogen strategy aims to expand this to 1 gigawatt of electrolysis capacity for the production of renewable hydrogen by 2030.

Funding mechanism

The subject of funding is the construction and operation of production plants for green hydrogen. The term begins with the commissioning of the production plant. Only new plants in Austria are eligible for funding.

A market premium model has been chosen. Subsidies are awarded through competitive auctions and are provided in the form of a fixed premium per unit produced. This is intended to offer operators long-term financial security.

The funding is to be handled by the Austria Wirtschaftsservice GmbH (aws). The aws acts as the central point of contact for processing the subsidies. The aim is to conduct the auction within the framework of the EU Innovation Fund. If no use is made of the possibility of an auction via the EU Innovation Fund, it is possible to commission the aws to carry out an auction. For this purpose, additional guidelines must be issued by the Federal Ministry for Climate Action, Environment, Energy, Mobility, Innovation and Technology (BMK) and the Federal Ministry of Finance (BMF), detailing the exact structure of the auctions, the criteria for funding and the rights and obligations of the funding recipients.

The funding requirements: EU RFNBO criteria

An important requirement is that the plants are operated exclusively with renewable energy. This is the only way to ensure that the hydrogen produced is actually “green” and contributes to the reduction of greenhouse gas emissions. In addition, the plants must meet the requirements of the EU Delegated Acts for “Renewable fuels of non-biological origin” (EU-RFNBO criteria – see also the article by the 360° EE practice group). These include, among other things, requirements for electricity procurement and greenhouse gas emission reduction.

Next steps in the parliamentary process

By the end of the review period, 18 comments had been submitted. The draft is now being discussed in the National Council and will be decided there. It remains to be seen whether this will happen in the current legislative period.

Much is still open with regard to the exact funding conditions and funding amounts and it is therefore also unclear which companies are eligible for funding under what circumstances. In any case, we will keep you informed.

For further questions and legal advice on this topic, the expert team of the 360° Renewable Energy practice group is available to assist you.

You can find further contributions on the topic of renewable energy on the 360° Renewable Energy website.

Disclaimer

This article is for general information only and does not replace legal advice. Haslinger / Nagele Rechtsanwälte GmbH assumes no liability for the content and correctness of this article.

 

23. April 2024

 

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