The European Commission has approved funding of up to 370 million euros ($402 million) for the construction of a project called "Green Hydrogen Valley" in the Puglia region of Italy. The project aims to drive the green energy transition, reduce carbon emissions and promote the use of renewable energy sources.

Sosteneo SGR, investment manager for Green Transition, said the funding was released through the European Project of Common Interest (IPCEI), which has been incorporated into the EU's Green Hydrogen initiative. This means that the EU will strongly support the production and application of green hydrogen to replace the use of fossil fuels in energy-intensive industries.

According to Monday's announcement, the plan will see the construction of 260 megawatts of solar photovoltaic (PV) power generation capacity and 160 megawatts of electrolysis capacity to produce green hydrogen around the cities of Brindisi and Taranto. The green hydrogen will be used primarily in the direct reduced iron (DRI) production process, helping the largest steel mill in Taranto, Italy, and a consortium of other Italian steel mills decarbonize the steelmaking process.

Meanwhile, Italian grid operator Snam also revealed in a separate statement that Brussels has included its project to retrofit existing pipelines and install new pipelines for hydrogen energy projects in southern Italy on the IPCEI list. The project is expected to be operational in 2028 with a total investment of around 100 million euros.

Through this series of initiatives, the EU and Italy are working together to promote the green energy transition, reduce carbon emissions and promote the development of renewable energy sources. This will not only help combat climate change, but will also lead to more environmentally friendly and sustainable production methods for energy-intensive industries such as steel. Editor/Xu Shengpeng