France awards €778 million to first low-carbon hydrogen projects

• France will provide production support to three hydrogen projects over 15 years for 161.4 MW of eligible electrolyser capacity.
• The wider developments proposes at least 415 MW, but large portions of the methanol and fertiliser projects fall outside this funding round.
• France is concentrating support on industrial uses where direct electrification is difficult and long-term hydrogen demand can be identified.

France has awarded €778 million of support to three low-carbon hydrogen projects, adopting a 15-year production mechanism intended to make industrial electrolysis developments financeable.

The first winners were Engie Solutions H2’s HydroZère project, Elyse Energy’s eM-Rhône development and FertigHy’s FertHySomme fertiliser plant.

Together, the projects will receive support for 161.4 MW of electrolyser capacity, representing the first allocation under a programme targeting approximately 1 GW. Payments will be linked to hydrogen production rather than provided solely as upfront capital grants.

HydroZère is a 5 MW electrolyser planned for Saint-Chély-d’Apcher. It will supply ArcelorMittal’s adjoining steel operation, replacing hydrogen currently produced by steam methane reforming. The gas will be used in an annealing furnace during steel surface treatment.

The project’s entire capacity is covered by the award.

Elyse Energy’s eM-Rhône development will combine electrolytic hydrogen with captured CO2 to manufacture methanol for chemical and transport markets.

The proposed plant includes a 210 MW electrolyser, but this mechanism will support only 61.1 MW associated with methanol sold for non-transport applications. That portion is expected to produce 50,000 tonnes of methanol annually, or 750,000 tonnes over the 15-year support period.

FertigHy plans a 200 MW electrolyser at Languevoisin-Quiquery as part of a new low-carbon nitrogen fertiliser complex. Hydrogen would provide the feedstock for ammonia and ammonium nitrate production, reducing dependence on natural gas and imported fertilisers. The award covers 95.3 MW of its capacity.

The winners have eight weeks to provide financial guarantees and request their contracts. If one withdraws, the government can offer support to the next project in the tender ranking.

Energy minister Maud Bregeon said the projects would use France’s low-carbon electricity “to produce hydrogen that will decarbonise our industry and enable the production of fertilisers without using fossil gas”.

Industry minister Sébastien Martin described the awards as “a concrete step forward for the reindustrialisation of our country”, covering value chains in chemicals, metallurgy and fertiliser production.

France permits electrolysers supported by both renewable and nuclear electricity, giving it a potential cost and utilisation advantage over schemes restricted to renewable hydrogen. The focus on existing industrial demand also reduces the offtake uncertainty that has delayed many European projects.

The scale of public support nevertheless illustrates the continuing gap between low-carbon hydrogen and fossil fuel alternatives. €778 million is being committed to a relatively small first allocation, while the three plants remain subject to financing, construction and operating risks.

France reduced its overall 2030 electrolysis ambition from 6.5 GW to 4.5 GW last year after deployment fell behind schedule. It retained a plan to provide approximately €4 billion for the first 1 GW of production-supported capacity.

The awards mark progress because they link subsidy to specific industrial uses rather than general hydrogen supply. Their eventual success will depend on whether long-duration support is sufficient to secure investment without leaving the state permanently responsible for an uneconomic fuel price gap.