The European Commission has redefined the financial framework for industrial decarbonisation through the implementation of the Clean Industrial Deal—a mechanism which, as Emilio Nieto, Director of the National Hydrogen Centre of Spain highlights, enables compatibility among various European subsidy schemes, allowing for the maximisation of public capital leverage while reducing private investors’ financial exposure.

“The Commission’s objective is to send a clear signal of its commitment to sustainable technological development,” he states in an interview with Strategic Energy Europe.

This new framework complements existing funds such as the Innovation Fund, allowing a single project to secure additional subsidies on the portion not covered by previous support mechanisms. “If the Innovation Fund covers 40% of the project, and the Clean Industrial Deal provides another 40% of the remainder, the developer only needs to assume 20% of the total cost,” he explains.

A more competitive environment for hydrogen

This new financial architecture establishes a significantly more competitive environment for renewable and low-carbon hydrogen projects, substantially reducing investment risk.

Nieto notes that many projects already underway will be able to restructure and reapply for funding, thereby enhancing both their technical and financial feasibility.

He also emphasises that the seven hydrogen valleys officially recognised in Spain—already beneficiaries of national and European support—will be key recipients in this new wave of funding: “These are projects that have achieved a high level of maturity and enjoy backing at the regional, national or EU level,” he notes.

Consolidation of Spain’s project pipeline

Spain currently reports a portfolio of 361 hydrogen projects, of which between 10% and 15% are already operational, while 30 to 35 initiatives have reached Final Investment Decision (FID) and are under construction.

From a technical standpoint, approximately 30–35% of projects are at TRL 6–7, in the industrial scaling phase, while a similar proportion remains in the pilot phase, actively seeking access to multilateral funding instruments.

“The portfolio is showing consistent and positive growth. Spain is on track to meet—and potentially exceed—the targets set out in its 2030 hydrogen roadmap,” Nieto affirms.

Technical optimisation for economic viability

In parallel with financial progress, project developers are adopting more resilient design strategies, particularly through the oversizing of electrolysis capacity as a buffer against volatility in the electricity market.

According to Nieto, this approach allows for intensive operation during low-cost electricity periods, thus maximising system performance.

“The installed capacity of electrolysers deliberately exceeds projected hydrogen demand, enabling production during periods when electricity costs approach zero,” explains the director. This operating model provides sufficient financial margins to safeguard business continuity, even in the face of regulatory or market fluctuations.

New technologies under the European radar

The revised framework, as promoted by the European Hydrogen Alliance, also reconfigures the Commission’s technological stance, now embracing solutions involving blue hydrogen, direct combustion technologies, and hydrogen blending in natural gas grids—approaches previously excluded from European energy policy.

“It has become evident that the anticipated pace of cost reductions has not materialised, and project deployment requires regulatory flexibility,” Nieto remarks. The shift in approach unlocks new opportunities in countries like Portugal, where hydrogen blending pilots are already operational.

A paradigm shift by 2025

Looking ahead, Nieto anticipates that 2025 will mark a structural turning point, as the most robust projects—both technically and financially—emerge as frontrunners. “We are reaching a maturity phase. The projects that will endure are those built on solid business models,” he states.

He stresses that production strategies should prioritise domestic industrial demand over immediate export orientation. Strategic sectors such as steel, ceramics, glass and cement should serve as primary off-takers, with export markets absorbing any surplus capacity.

When asked about the institutional priorities that should shape national hydrogen policy, Emilio Nieto identifies four structural pillars essential to accelerating the consolidation of Spain’s industrial hydrogen ecosystem—framed around competitiveness, strategic autonomy and technology neutrality.

Firstly, he advocates for the creation of institutional frameworks that actively foster collaboration among industrial stakeholders, technology centres, and project developers. “The ecosystem remains fragmented, with promoters still operating in silos and rarely sharing technical insights or lessons learned. Building a coherent national strategy requires integrated consortia and governance models that prioritise synergy,” he asserts.

Secondly, he underscores the importance of retaining value-added within Spain’s productive fabric. In his view, this requires the development of localised industrial capabilities, from the manufacture of critical components to engineering, operations and maintenance services. “It is not about excluding international players, but about enhancing the competitiveness of domestic firms vis-à-vis Asian or American manufacturers through active industrial policy,” he emphasises.

Thirdly, Nieto calls for a strategic commitment to technology neutrality, ensuring that complementary low-carbon solutions—such as batteries, circular economy models, or Power-to-X technologies—gain access to equivalent financing instruments and institutional visibility. “Hydrogen is essential, but it is not the only lever for decarbonisation. Our national strategy must reflect that multidimensional approach,” he maintains.

Finally, he stresses the adoption of scalability and proportionality criteria in project design, ensuring alignment with actual market demand and avoiding excessive sizing driven by speculative expectations or rigid contractual obligations. Nieto concludes: “We must avoid paper projects disconnected from real absorption capacity. What we need is adaptive planning, geared towards systemic industrial integration.”