France Hydrogène has acknowledged the presentation of the 2027 Finance Bill – PLF containing three measures that have been awaited by the sector. They are a double auction mechanism when it comes to synthetic aviation fuels – e-SAF, the introduction into force of the Incentive to Reduce the Carbon Intensity of Fuels -IRICC and the introduction of the second tranche of the support mechanism for low-carbon hydrogen production – MSP which is valued at €1.2 billion.
The association said these measures are among the top objectives determined at the steering committee of the Hydrogen Strategy on July 22, with the aim of assisting French industrial projects in arriving at final investment decisions. The subject is placed in a European context where the expansion of hydrogen in the EU is expected to have a limited impact on most water resources.
Double-auction system for e-SAF
As reported by France Hydrogène, France has the biggest portfolio of e-SAF projects in Europe and the second-largest in the world, after China. Demand for e-SAF is driven by the ReFuelEU Aviation regulation. The double-auction mechanism is designed to match producers, who need 10- to 15-year commitments to make investments, with consumers, who can hardly commit more than 3 years. Elsewhere, the demand for sustainable aviation fuels is igniting other efforts, including India’s effort to lock down its used cooking oil supply for SAF.
Twelve French projects could be put into operations between 2030 and 2035, the association says. They would equal in excess of 800,000 tonnes of annual e-SAF production capacity and over 14 billion euros in potential investment.
Electrolysis, jobs, and secure volumes
France Hydrogène says the deployment of these projects would require 3.4 GW of electrolysis, which is 40% of the objective of the National Hydrogen Strategy for 2035. Running the sites would mean more than 3,600 permanent direct and indirect jobs. Within the country, some 27 TWh of decarbonized electricity would be converted into industrial added value.
The mechanism that the government is planning will ensure the production of up to 160,000 tonnes of e-SAF a year. This volume fulfills the 2% requirement for 2032 under ReFuelEU Aviation. The association ties it to two big projects, worth nearly €3 billion in private hydrogen investment.
The IRICC and the second tranche of the MSP France Hydrogène welcome the integration of the IRICC into the finance bill, which they hope will guarantee demand for renewable and low-carbon hydrogen in refining and synthetic fuels for maritime and road mobility. The association estimates that the incentive should trigger nearly €2 billion of private hydrogen investment in those sectors. The figure is a median value that depends on the size of the hydrogen quota ultimately adopted.
The budget validates the €1.2 billion cap to fund the second tranche of the MSP winners, launched in September 2026, after the announcement of the first MSP winners this summer. The mechanism should result in new final investment decisions in steelmaking, fertilizers, and chemicals, the association said.
Nicolas Brahy, president of France Hydrogène, says, “the sector is at a pivotal moment” and must resume major final investment decisions in 2027. If these three measures are voted, French potential will finally be turned into industrial investment.”