France supports hydrogen investment in 2027 budget

The draft French budget for 2027 gives the country’s hydrogen industry a strong boost. Support will be implemented through three measures aimed at stimulating investment and demand, as well as a new auction mechanism for synthetic aviation fuels.

The draft budget was reported by RenewablesNow. Industry association France Hydrogène welcomed the measures, saying they could help move individual projects from the development phase to one that includes investment decisions. One of the most significant proposals in the budget is a two-sided auction mechanism to support the production of synthetic sustainable aviation fuel (eSAF), an important technology for reducing emissions from air transport.

The draft budget also provides for the introduction of the IRICC programme, a French incentive scheme to reduce the carbon intensity of fuels. The programme is expected to stimulate demand for renewable and low-carbon hydrogen in several sectors, including oil refining, marine fuels and road transport. According to France Hydrogène, the IRICC programme could attract nearly 2 billion euros in private investment in hydrogen projects.

A further 1.2 billion euros has been allocated to the second phase of France’s support mechanism for low-carbon hydrogen production. This funding follows the government’s announcement in September of a second auction for 250 MW of clean hydrogen.

France is also positioning itself as a major European hub for eSAF development. There are currently 12 eSAF projects under way in the country, which could come online between 2030 and 2035, with total potential production exceeding 800 000 tonnes per year. The planned government auction would support annual eSAF production of up to 160 thousand tonnes. That is roughly the volume France needs to meet the requirement for a 2% eSAF share by 2032 under the EU’s ReFuelEU Aviation rules.

Timing is particularly important for the hydrogen industry, and not only in France. According to France Hydrogène president Nicolas Brahy, developers will need to make crucial final investment decisions in 2027. The proposed measures could therefore give investors greater certainty while helping France build domestic capacity in hydrogen and synthetic aviation fuels.