On Tuesday, four energy companies revealed their plans to undertake two distinct green hydrogen projects in Italy, aiming to provide eco-friendly fuels to consumers and leverage funding from the European Union's post-pandemic recovery fund. Snam, the Italian gas grid operator, and utility Hera announced a collaborative agreement to develop a green hydrogen production site near the northern city of Modena. Concurrently, Engie's Italian unit, along with gas distributor Società Gasdotti Italia (SGI) and the local industry lobby Consorzio Industriale Lazio, disclosed their joint initiative to produce green fuel in the vicinity of Rome.

The joint venture between Snam and Hera, amounting to 20 million euros ($21.6 million), entails the establishment of a photovoltaic plant. This facility will supply green energy to an electrolyser, generating hydrogen from water. At maximum capacity, the project aims to produce 400 tonnes of green fuel annually. While the current cost of hydrogen remains relatively high, Hera Chief Executive Orazio Iacono highlighted the potential for significant cost reductions, estimating a possible halving of the price to approximately 5 euros per kilogram with government incentives. He emphasized that, when coupled with existing incentives on capital expenditure, this price could be deemed competitive by customers.

The green hydrogen produced through this venture is slated for use by local public transport entities and may also be accessible to energy-intensive companies situated near Modena, including those in the tile-making and automotive sectors. As part of its business plan through 2026, Snam has allocated 1 billion euros for decarbonization investments. This includes the development of a pipeline, known as the SoutH2 Corridor, to transport hydrogen from North Africa to northern Europe. Snam Decarbonisation Unit Executive Director Piero Ercoli revealed plans to conduct a market test for cross-border hydrogen infrastructure in the coming year.

In a parallel effort, the collaborative project involving Engie, SGI, and the local industry lobby aims to commence production in 2026, targeting an annual hydrogen capacity of 400 million tonnes. The estimated cost of this initiative is 20 million euros, with 9.5 million euros slated to be sourced from public funds.

These initiatives reflect a concerted effort by the participating energy companies to contribute to the growing demand for green hydrogen and align with broader sustainability goals. Leveraging funding from the European Union's recovery fund underscores the commitment to accelerating the transition toward cleaner and more sustainable energy sources. As hydrogen gains prominence as a key player in the energy transition, these projects are poised to play a crucial role in shaping Italy's green hydrogen landscape and contributing to the broader European clean energy ecosystem.