Romania: new state aid scheme for investments in the green hydrogen sector

Objectives and Limitations

The Romanian Ministry of Energy has recently closed the public consultation on the state aid scheme targeted at boosting investments in the construction of green hydrogen production capacity in electrolysis plants, financed via the National Recovery and Resilience Plan (NRRP).  This state aid scheme draft aims to support the expansion of green hydrogen production capacity, reduce greenhouse gas emissions and increase the share of renewable energy sources.

The eligible projects under this scheme are expected to provide the installation of green hydrogen production capacity of at least 100 MW in electrolysis plants, producing at least 10,000 tons of hydrogen annually from renewable sources (wind, hydro or solar power) by 31 December 2025.

Furthermore, the storage capacity, as part of the green hydrogen technology process, must be proportional to the production capacity, but during the project’s implementation, storage capacity expenses up to 20% of the cost of the production facility will be reimbursed.

As regards the amount of the granted aid, the total estimated budget rises to the equivalent in RON of EUR 149,500,000, consisting of EUR 115,000,000 of non-reimbursable European funds provided by the Recovery and Resilience Mechanism under the National Recovery and Resilience Plan and EUR 34,500,000 of national funds by applying an over-contracting percentage of 30%.

The eligible projects under this scheme are expected to provide the installation of green hydrogen production capacity of at least 100 MW in electrolysis plants, producing at least 10,000 tons of hydrogen annually from renewable sources by 31 December 2025.

Moreover, the storage capacity, as part of the green hydrogen technology process, must be proportional to the production capacity, but during the project’s implementation storage capacity expenses up to 20% of the cost of the production facility will be reimbursed.

As regards the amount of the granted aid, the total estimated budget rises to the equivalent in RON of EUR 149,500,000, consisting of EUR 115,000,000 of non-reimbursable European funds provided by the Recovery and Resilience Mechanism under the National Recovery and Resilience Plan and EUR 34,500,000 of national funds by applying an over-contracting percentage of 30%.

The maximum aid that can be granted per company may not exceed EUR 50 million. In this regard, the difference up to the total value of the project is covered by the beneficiary. Nonetheless, for the same beneficiary and the same eligible expenditure, state aid for investment granted under this scheme may not be cumulated with any other state aid for investment granted, including de minimis aid.

This state aid scheme for investments in the construction of green hydrogen production capacity in electrolysis plants will apply from the date of entry into force until 30 June 2024.

Eligibility Criteria

According to the provisions of the government decision draft, the concept of “potential beneficiaries” may refer to:

• natural gas distribution operators;
• small, medium and large electricity generating companies;
• small, medium and large green hydrogen producers;
• administrative-territorial units, including associations / partnerships formed by applicants mentioned in the above categories;
• national energy research and development institutes.

For the aforementioned potential beneficiaries to access the state aid scheme, they must cumulativelyfulfil inter alia the following conditions:

• they perform as their main activity or among one of their business activities, according with the company’s bylaws, the activity of electricity generation corresponding to NACE Codes class 35 “Electricity, gas, steam and air conditioning supply” or class 20 “Manufacture of chemicals and chemical products“;
• they are not in payment default, under insolvency, liquidation process, bankrupt or in another similar situation;
• they have fulfilled their obligations to pay taxes, fees and social security contributions to the component budgets of the general consolidated budget;
• there is no serious breach of the provisions of public procurement legislation or of the obligations assumed under a contract / agreement for public funding;
• the applicant / legal representative of the applicant has not been convicted of professional misconduct against the law, for fraud, corruption, involvement in criminal organisations or other illegal activities detrimental to the European Community’s financial interests by a final decision (res iudicata) issued by a court of law;
• they are not subject to an outstanding recovery order following a previous decision of the Competition Council, the European Commission or another state aid provider declaring the state aid as being illegal and incompatible with the internal market.

Furthermore, the projects for which it is planned to obtain state aid must, in turn, meet a number of eligibility criteria, as follows:

• to be selected following the call for proposals procedure;
• to be implemented on the territory of Romania;
• aiming to build new capacity, including the expansion of green hydrogen production;
• the project complies with the “incentive effect” principle which leads the beneficiary to change its behaviour and to engage in additional economic activity or more environmentally friendly economic activity;
• the project implementation period falls within the period of eligibility of expenditure, respectively between the date of granting the aid and the expected date of completion, but no later than 31 December 2025;
• the amount of the requested grant does not exceed EUR 50,000,000 per undertaking, per investment project (equivalent in RON at the euro exchange rate of the month preceding the submission of the grant application).

Methods for Implementing the State Aid Scheme

The support measures which will be granted to applicants consist of non-reimbursable financial allocations from European funds and are implemented following a selection procedure within the call for proposals process.

The Ministry of Energy is the responsible authority which will determine the eligibility criteria of each applicant for granting the state aid. Thus, the selected state aid beneficiaries following the call for proposals will sign the financing agreements with the Ministry of Energy.

In addition to the above, the state aid provider will grant the state aid only after verifying the fulfilment of the specified eligibility criteria, including those relating to the maturity of the projects, their feasibility and the implementation conditions which provide for the completion of the investments within the set time limits.  

Funding applications should be submitted through the dedicated electronic platform PNRR including all required annexes. Given that the submission of the funding application is done electronically, a maximum of 2 clarifications can be requested for the first stage of evaluation, and the applicant has the obligation to respond within a maximum of 5 working days.

Interested persons or entities will be able to make comments and proposals, which should be sent to the following e-mail address: fonduri.europene@energie.gov.ro

Considering that this state aid scheme was submitted as a draft for public consultation until the end of February 2022 and that several observations were already made to its content, the current form may be subject to further amendments.