Businesses have little interest in hydrogen technology government support | News

The Environmental Investment Center (EIC) announced the support to develop a complete chain for the generation and use of green hydrogen in January, which would be utilized as a fuel in transport or as material in the chemical industry to produce feedstock. The application date was August 28.

The EIC hydrogen support project coordinator Tiiu Noormaa told ERR that four proposals are being reviewed.

The recovery plan based on the EU Recovery and Resilience Facility (RRF) anticipates €49.49 million to be released by the second quarter of 2026 for investments in green hydrogen technologies based on renewable energy sources. The EIC received no applications of this scope.

“Because applications are still being reviewed, it is too early to determine how much the EIC will decide to grant. The sum will be known by the end of the year,” Noormaa said.

Noormaa explained that the Recovery and Resilience Facility’s over-ambitious requirements influenced applicants’ lack of interest: in the transport sector, the scheme must include production of green hydrogen, supply (refueling stations), and consumption (vehicle purchases); in the chemical sector, projects must build green-hydrogen and chemical feedstock production facilities as well, due to the integrated chain need. The timetable is also tight. The green hydrogen production unit itself must be ready for use by the end of the third quarter of 2025 and the entire project by the beginning of March 2026.

The GBER conditions regulating the categories of state aid were also recently changed. The application call was announced while new aid conditions were drafted. The new regulation lowers state assistance for green-blue production units from 100 percent to 45 percent of investment costs.

“The conditions of the grant had to be amended, the deadline for applications had to be extended,” she said.

Estonian island ferries to green fuel

Last week, the Estonian Hydrogen Association sent a letter to the climate minister and the regional minister pointing out that there is essentially no production and consumption of hydrogen in Estonia.

The association said that the low interest in the state support measure stems precisely from the fact that the price of the production is too high due to the small volumes of the green fuel consumed in Estonia.

Hydrogen transportation and distribution equipment cost more, and the subsidy does not cover the difference, claims the hydrogen association. To expand hydrogen usage, hydrogen can be used as a fuel for ferries, the association suggests.

In 2026, a new hybrid ferry is expected to arrive on the routes between the main islands and the mainland. The association believes its operator should use green-hydrogen on the Kuivastu – Virtsu route in enough quantity to ensure that the ferry is always used in the technically optimal mode. This would necessitate an annual green hydrogen stock of about 150 tons.

The group also suggests using the new hybrid ferry half of the year on the Rohuküla – Heltermaa route, which would additionally utilize 300 tons of green fuel per year. The Kihnu, Soela and Vormsi ferries should also be converted to hydrogen fuel, which together would consume 210 tons per year.

“Taken together, these proposals would mean an annual consumption of 660 tonnes of greenhydrogen sulphur, the production of which is estimated to require a five-megawatt electrolyser. Such a capacity would also allow Estonian hydrogen producers to participate in the EU Innovation Fund’s hydrogen bank auction, which sets a minimum capacity of five megawatts for electrolyzers. This support would allow the final price of hydrogen for Estonian consumers to be reduced by up to €4.5 per kilogram,” the association said.

EIC intends to change the conditions for granting support

Noormaa said that the agency, together with the Ministry of Climate, has drawn up a plan that could help to meet the objective of the recovery plan. The conditions of the grant will be amended and the draft enabling legislation is awaiting approval by the relevant authorities by November 14.

“Once the amended regulation enters into force, the EIC will launch a new call for proposals, this time for the transport sector only. This will make it possible to simplify the conditions and open up the possibility of participating in ferry projects; however, only if a whole chain is guaranteed to be completed by 2026,” Noormaa said.

The amendment to the regulation also extends the deadline to June 1, 2026.

Noormaa said that the ferry should only use green hydrogen to qualify for the subsidy, just like other vehicles supported by the Recovery and Resilience Facility (RRF).

In 2021, Utilitas received about €5 million from the state measure to build a biomass-based renewable electricity production facility, two filling stations and 30 hydrogen-powered cars to be rented as taxis in Tallinn. The work is expected to be completed by the end of 2024.

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